TIDMEPIC
RNS Number : 8102E
Ediston Property Inv Comp PLC
23 October 2018
Ediston Property Investment Company plc
(LEI: 213800JRL87EGX9TUI28)
Net Asset Value ("NAV") as at 30 September 2018
Ediston Property Investment Company plc (LSE: EPIC) (the
"Company") announces its unaudited NAV as at 30 September 2018.
Quarter highlights
-- NAV per share at 30 September 2018 of 115.30 pence (30 June
2018: 114.19 pence), an increase of 1.0%.
-- The NAV total return (including dividends) for the quarter
was 2.2%, resulting in a NAV total return for the Company's
financial year to 30 September 2018 of 8.9%.
-- Fair Value independent valuation of the property portfolio as
at 30 September 2018 of GBP333.9 million, an increase of 0.8%
compared to the valuation at 30 June 2018.
-- Lease extension agreed on the office building, Midland Bridge House, Bath.
Net Asset Value
The unaudited NAV of the Company at 30 September 2018 was
GBP243.67 million, or 115.30 pence per share, an increase of 1.0%
on the Company's NAV per share as at 30 June 2018.
Pence Per Share GBP million
NAV at 30 June 2018 114.19 241.32
---------------- ------------
Valuation increase in property
portfolio 1.03 2.17
---------------- ------------
Capital expenditure (0.18) (0.38)
---------------- ------------
Income earned 2.51 5.31
---------------- ------------
Expenses & finance costs (0.81) (1.71)
---------------- ------------
Dividends paid (1.44) (3.04)
---------------- ------------
NAV at 30 September 2018 115.30 243.67
---------------- ------------
The NAV attributable to the ordinary shares has been calculated
under International Financial Reporting Standards ("IFRS"); the
EPRA NAV is not reported separately in this update as it is the
same as the IFRS NAV.
The NAV incorporates the independent portfolio valuation as at
30 September 2018 and undistributed income for the quarter but does
not include a provision for any accrued dividend.
Dividends Paid
The Company paid a dividend of 0.4792 pence per share in each of
July, August and September 2018, resulting in a cumulative dividend
payment in the quarter of 1.4376 pence per share. The monthly
dividend rate of 0.4792 pence per share equates to an annualised
dividend of 5.75 pence per share.
The Board remains committed to paying a monthly dividend which
is covered and sustainable, and looks to grow dividends over the
longer term. The annual dividend is fully covered.
Asset Management Activity
During the quarter the Company restructured its lease terms with
its tenant, Royds Withy King, at Midland Bridge House, Bath.
Royds Withy King occupy the entire property, which extends to c.
18,500 sq. ft., on a lease which had been due to expire in March
2023. During the quarter the Company signed an agreement to extend
the term of the lease by six years to expire in March 2029. The
tenant will receive an incentive equivalent to 5.8 months rent
free. The rent will remain at GBP360,000 per annum which was agreed
following the rent review in March 2018, when an increase of 11.5%
on the previous passing rent was secured. As a result of this
transaction the value of the property has increased in value by
13.4%.
The lease restructure with Weightmans LLP at St Philips Point,
Birmingham, as announced previously, became effective from 1 August
2018, resulting in a further increase in the value of this
property. Over the six months to 30 September 2018, the capital
value of St Philips Point has increased by 11.8%.
Outlook
There is still good demand from a wide range of investors for UK
real estate. However, the main sectors of the property market are
moving in different directions, driven by sector specific
reasons.
Prospects of rental growth and a lack of supply have seen yields
remain firm in office markets. Industrial yields have tightened but
look very expensive relative to other sectors.
In retail, the high street and shopping centre markets remain
challenging, with all but the best assets likely to decline in
value. There is more opportunity in the retail warehouse market as
yields, relative to other sectors, are looking attractive. The
sector has not been immune from retailer failure but a number of
tenants are taking advantage to progress expansion plans in units
that have become available. Retail parks with flexible planning
consents, which trade well and are let off affordable rents are
proving resilient and many units which are vacated by tenants are
being re-let. The Investment Manager believes that the Company's
retail warehouse assets have these positive attributes.
The implications of Brexit remain the biggest unknowns at the
moment and, regardless of whether or not it is a 'hard-Brexit', the
UK property market will be impacted in some way. There is no
consensus view as to what will happen, but it is likely that there
will be a pause and more subdued property market activity. This
occurred immediately after the EU referendum in 2016, when
investors and tenants alike considered where the market was
heading, but the recovery was quite quick thereafter. Central
London offices remain the most vulnerable and the Company has no
exposure to this market.
The Investment Manager will continue to intensively manage the
property portfolio to protect income, grow it where possible and
create new income streams from underdeveloped assets. A number of
asset management initiatives are well advanced, and these will be
reported on when complete.
Portfolio Composition
Sector
Sector Exposure
(%)
Retail warehouse 73.33
---------
Office 22.93
---------
Other commercial 2.92
---------
Development 0.82
---------
Geography
The portfolio is diversified across the regional markets and has
no exposure to Central London assets.
Sector Exposure
(%)
Wales 29.51
---------
North East 15.69
---------
North West 15.35
---------
Yorkshire 11.95
---------
West Midlands 11.65
---------
Scotland 9.63
---------
East Midlands 4.25
---------
South West 1.97
---------
William Hill, Chairman, commented:
"The quarter's results, showing a further increase in the NAV,
brings the Company's financial year to a satisfactory close - a
year in which the equity base of the Company has increased by over
60%, the total assets have risen by 75%, the dividend per share
advanced by 4.5%, the ongoing charges (excluding direct property
costs) reduced from 1.5% to 1.3% and a NAV total return of 8.9% has
been delivered."
Calum Bruce, Investment Manager, commented:
"The continued growth in the NAV illustrates that our intensive
approach to asset management is delivering results. With Brexit on
the horizon, there will be challenges ahead, but with a portfolio
which has defensive qualities we are well placed to deal with them,
and to capitalise on any opportunities which may appear."
Forthcoming Events
The next scheduled independent quarterly valuation of the
property portfolio will be conducted by Knight Frank as at 31
December 2018 with the unaudited NAV per share at that date
expected to be announced in January 2019.
The Company has shareholder approval for 'tap issuance' for up
to approximately 20 million shares, if issuance is appropriate.
The Company intends to publish a factsheet during October 2018
which will be made available on the Company's new website at
www.ediston-reit.com. The audited year-end accounts are likely to
be published in December 2018.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014. Upon the
publication of this announcement via Regulatory Information Service
this inside information is now considered to be in the public
domain.
Enquiries
Will Barnett - Canaccord Genuity
0207 523 8000
Calum Bruce - Ediston Properties Limited 0131 225 5599
Donald Cameron - Maitland Administration Services (Scotland)
Limited 0131 550 3763
Ben Robinson - Kaso Legg Communications 0203 137 7821
Stephanie Ross - Kaso Legg Communications 0203 137 7784
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contact rns@lseg.com or visit www.rns.com.
END
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