TIDMBRU2
Bruntwood Bond 2 PLC
26 April 2021
26th April 2021
BRUNTWOOD GROUP LIMITED
BRUNTWOOD INVESTMENTS PLC
BRUNTWOOD BOND 2 PLC
UPDATE STATEMENT ON COVID-19 RENT COLLECTION AND ANNUAL
RESULTS
Bruntwood Group Limited ("Bruntwood") today updates the market
on the impact of the Covid-19 pandemic on its business and a
summary of the latest rent collection position.
Chris Oglesby, CEO of Bruntwood, said
"Since the start of January's national lockdown we and most of
our customers largely operated remotely although our buildings
remain open to support those who cannot work from home. Footfall in
our buildings had been around 25% of pre pandemic levels initially
but we have seen this change sharply as the Government restrictions
have begun to ease. As of early April, footfall was 40% of pre
pandemic levels and we expect to see this continue to rise over the
coming weeks as businesses begin a phased return to the workplace.
We know from engagement in the business communities in our cities
the value that businesses are placing on their offices as places
for people to collaborate, create and develop strong business
cultures"
Financial Position
As at 20th April, the Group has GBP17m of cash reserves, GBP40m
of undrawn committed available facilities and GBP68m of
unencumbered assets upon which further finance could be secured. In
addition, the group has GBP19m of retained bonds which it could
issue to the market.
Bruntwood 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 35% on the majority of
our facilities and in excess of 20% on our NatWest Club facility.
Income would have to fall by over 35% 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
As of 20th April 2021, 95% of December quarter rents and 97% of
September 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 are 96% of
December rent and 97% of September.
As at 20th April 2021, 80% of March quarter rents had been
collected (81% excluding retail). This is consistent with the
December / September quarters at a comparable point. 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 a focus on controlling non-essential
expenditure has ensured that the business continues to stay cash
positive before capital outlay is taken into account. Retention
levels at break and expiry are in excess of 70% and vacancy levels
are currently 9.3%, a level which has barely moved in the last
year.
Weighted average unexpired lease term has improved from 4.9 to
5.2 years following completion of a new 60,000 sq ft building at
Booths Park that has been let to Portswigger on a 15 year
lease.
Headline rents remain consistent with previous run rates
although we are beginning to see some evidence of increasing
pressure on the rent free concessions or fit out contributions
required to secure new lettings, something which is fully factored
into our forward plans.
In February 2021, Bruntwood Scitech Ltd ("Scitech") acquired
Melbourn Science Park, Cambridge for GBP46.2m, growing our national
network of innovation districts and forming a new strategic
partnership with leading independent technology and product
development company TTP plc. The partnership is intended to enhance
the potential for our community of customers to access finance, new
markets, products and prototyping opportunities.
SciTech will work closely with the local planning authority in
the coming months to develop a new ambitious masterplan for the
16.4 acre site; creating a long term vision for the future growth
of the science park as a leading science and technology cluster in
Cambridge.
In addition, the 400,000 square foot first commercial phase of
Circle Square (part of the SciTech JV with Legal and General)
reached practical completion in February 2021 with 75% of the first
phase either already let or under instruction. No future phases are
committed at this stage as future development schemes will only
proceed based on the achievement of pre-let hurdles or a
strengthening in market demand.
Bruntwood SciTech also completed a 3 year extension to its third
party funding facility with its banking syndicate. The new GBP280m
facility (an uplift of GBP95m on the previous facility) will
support the continued investment in the business' development of
life science and technology ecosystems.
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
Patrick King (Peel Hunt) +44 (0) 203 597 8622
Mark Glowery (Allia C&C) +44 (0) 203 039 3465
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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