TIDMEPIC
RNS Number : 8362M
Ediston Property Inv Comp PLC
26 January 2021
Ediston Property Investment Company plc
(LEI: 213800JRL87EGX9TUI28)
Net Asset Value ('NAV') as at 31 December 2020
And Trading Update
Ediston Property Investment Company plc (LSE: EPIC) (the
'Company') announces its unaudited NAV at 31 December 2020.
Quarter Summary
-- 96% of rents due for quarter 4 collected.
-- Completed lease restructure with AXA Insurance UK plc at St
Philips Point, Birmingham, securing GBP687,696 of income per
annum.
-- At Pallion Retail Park, Sunderland, upsized B&M from a
unit of 20,000 sq. ft. to 30,000 sq. ft., on a lease which will
expire in 2032.
-- Monthly dividends maintained during the quarter at an
annualised rate of 4.00 pence per share.
-- Dividends for quarter 4 were fully covered at a rate of 139% (on a cash basis).
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-- NAV total return (including dividends) for the quarter of -0.5%.
-- Fair value independent valuation of the property portfolio at
31 December 2020 of GBP272.5 million, a like-for-like decrease of
1.3% compared to the valuation at 30 September 2020. This takes
into account the capital expenditure on the development project at
Haddington.
-- NAV per share at 31 December 2020 of 84.63 pence (30
September 2020: 86.01 pence), a decrease of 1.6%, reflecting the
impact of capital expenditure and the Company's borrowings.
-- Share price total return for the quarter of 39.7%. The
discount to NAV narrowed from 41% to 19% at the end of the
quarter.
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-- Rent collection for quarter 1 2021 is projected to reach 90%,
assuming those tenants paying monthly continue to do so.
Net Asset Value
The unaudited NAV of the Company at 31 December 2020 was
GBP178.8 million, or 84.63 pence per share, a decrease of 1.6% on
the Company's NAV per share as at 30 September 2020.
Pence Per Share GBP million
NAV at 30 September 2020 86.01 181.76
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Valuation of property portfolio (0.21) (0.45)
---------------- ------------
Capital expenditure (1.66) (3.51)
---------------- ------------
Income earned 2.27 4.79
---------------- ------------
Expenses & finance costs (0.78) (1.65)
---------------- ------------
Dividends paid (1.00) (2.11)
---------------- ------------
NAV at 31 December 2020 84.63 178.83
---------------- ------------
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
31 December 2020 and undistributed income for the quarter but does
not include a provision for any accrued dividend.
Rent Collection for quarter 4 2020
As at 25 January 2021, 96% of the rent for quarter 4 2020 has
been collected. To date, no rent forgiveness has been agreed unless
the Company has received some benefit in return. On a cash basis,
the dividend cover for quarter 4 was 139%.
Update on rent collection for quarter 1 2021
As at 25 January, 88% of the rent due by 1 January has been
collected across the portfolio. If the tenants who paid their rent
monthly in January continue to do so for February and March, it is
projected that the Company will collect 90% of the rent due for
quarter 1, rising to 92% once rent deferment and repayment plans
are factored in. The percentage of rent forecast to be collected
has fallen this quarter and this can be attributed to the current
lockdown restrictions. It is likely that some tenants will seek a
degree of cash flow assistance. Any requests will be considered in
the same way as during previous lockdowns.
If this projection is correct, on a cash basis, the current
dividend level will be 126% covered by rent collected for quarter
1.
Asset management and development update
At St Philips Point in Birmingham, the Company completed a lease
restructure with existing tenant AXA Insurance UK plc. The previous
leases each had a tenant break option in June 2021. AXA has
committed to 27,990 sq. ft. of space across three floors, including
a new lease on the vacant refurbished first floor which extends to
14,208 sq. ft. AXA reduced the amount of floorspace it leases by
5,005 sq. ft. and will occupy three floors instead of five. One
floor has a break option in June 2022, one has a break option in
December 2023, and the largest floor is leased for a term certain
of five years. The Company worked in collaboration with the tenant
to identify an occupational solution which offered flexibility to
deal with the challenges posed by COVID-19. This transaction
secures GBP687,696 of rental income per annum.
At Pallion Retail Park in Sunderland, B&M has upsized from a
unit of 20,000 sq. ft. into a vacant unit of 30,000 sq. ft. B&M
will pay an annual rent of GBP400,000 and the lease will expire in
2032. This is the third time the Company has been able to
accommodate B&M's expansion on its retail parks having
completed similar deals at Barnsley and Hull in previous years.
The Company completed two pre-let developments during the
quarter, at Coatbridge and Barnsley, which secured GBP232,500 of
income per annum. The Company's development at Haddington Retail
Park is progressing well. It remains on time and on budget and is
expected to complete in June 2021.
Dividends
The Company continues to pay a monthly dividend at a rate of
0.3333 pence per share, equating to an annualised dividend of 4.00
pence per share. The dividend remains fully covered.
As shown in the monthly dividend announcements, the Company's
rental income receipts have been sufficient for the Company to hold
the reduced dividend, with a growing margin of cover during 2020.
The Board is looking for an opportunity to start the process of
building the dividend back up again as soon as it is prudent to do
so, and with regard to the REIT distribution requirements.
Cash and cash management
As at 25 January 2021, the Company had approximately GBP10.2m of
cash for operational purposes. It also has GBP8.2m of cash under
its debt facility ring fenced specifically for investment.
The Investment Manager continues to review the composition of
the portfolio and will look for opportunities to sell assets where
it believes the capital can be redeployed more favourably. As a
result, cash levels could fluctuate during any sale and
reinvestment process.
Debt and loan covenants
The Company's debt is provided by Aviva Commercial Finance
Limited through two facilities, totalling GBP111.1 million of which
GBP102.9 million is drawn. There are no imminent refinancing events
as GBP56.9 million matures in 2025 and GBP54.2 million matures in
2027. The facilities have a blended all-in fixed rate of interest
of 2.86%. At the date of the December valuation, the average
loan-to-value across both facilities was 37.7%, based on portfolio
asset values and in accordance with the loan agreements' covenants.
The Company is fully compliant with all debt covenants and has
significant headroom against income and asset cover covenants.
Summary
During the period, the restrictions intended to stop the spread
of COVID-19 were tightened, including the reintroduction of full
lockdown measures in various parts of the country, that prevented
certain businesses from opening. Encouragingly, rent collection
held up as businesses adapted to these conditions. Out of town
retailers were better prepared than they had been for previous
lockdowns and many stayed open for trade. Several retailers who
were not classed as 'essential' by the Government offered click and
collect, appointment only or delivery services to enable sales to
be fulfilled.
Despite the local lockdown restrictions in place during
November, 90% (by income) of the Company's retail warehouse
portfolio was either open for trade or was offering a click and
collect service.
As at 25 January, in the midst of another national lockdown, 73%
(by income) of the retail warehouse portfolio is either open or
offering a click and collect service. This compares favourably to
the first lockdown in 2020 when 56% of the Company's income was
from tenants who were allowed to open for trade.
The immediate focus remains on managing the Company's income
through the current lockdown from all parts of the portfolio, and
to ensure that the current dividend remains fully covered. The
Investment Manager will continue with its hands-on approach to rent
collection and arrears recovery, which delivered good levels of
rent collection during 2020.
However, this focus will not be to the detriment of active asset
management and the long-term strategy of the Company. The
Investment Manager continues to look for ways to improve the
portfolio from both a capital and income perspective.
Portfolio sector weightings and tenant and locational
exposure
Sector
Sector Exposure
(%)
Retail warehouse 59.8
---------
Office 26.4
---------
Supermarket 9.6
---------
Development 2.3
---------
Other commercial/
Leisure 1.9
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Geography
The portfolio is diversified across the regional markets.
Sector Exposure
(%)
Wales 29.8
---------
North East 15.1
---------
West Midlands 13.2
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Scotland 12.7
---------
North West 11.7
---------
Yorkshire 11.1
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East Midlands 4.2
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South West 2.2
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Top five tenants
Tenant Exposure (%)
B&Q plc 9.3
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Tesco Stores Limited 7.5
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B&M Retail Limited 6.2
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AXA Insurance UK
plc 5.8
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Marks & Spencer
plc 5.4
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Forthcoming events
The next interim dividend announcement is expected to be made by
4 February 2021. The next scheduled independent quarterly valuation
of the property portfolio will be conducted by Knight Frank LLP as
at 31 March 2021, which will form part of the Company's interim
report.
The Company intends to publish its next factsheet shortly which
will be made available on the Company's website at
www.ediston-reit.com.
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 - Investec Bank plc 0207 597 5873
- Ediston Properties
Calum Bruce Limited 0131 225 5599
Ruth Wright - JTC 0203 893 1011
Ben Robinson - Kaso Legg Communications 0203 995 6672
Stephanie
Ross - Kaso Legg Communications 0203 995 6676
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