REG - abrdn Euro Logistics - Q3 2024 Net Asset Value and 3rd Interim Dividend

abrdn European Logistics IncomeAnnouncement

28/11/2024 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241128:nRSb9277Na&default-theme=true

RNS Number : 9277N  abrdn European Logistics Income plc  28 November 2024

28 November 2024

abrdn European Logistics Income plc

Unaudited Net Asset Value as at 30 September 2024 and declaration of a Third
Interim Dividend

28 November 2024 - abrdn European Logistics Income plc (the "Company" or
"ASLI"), the Company which is invested in a diversified portfolio of European
logistics real estate, announces its unaudited Net Asset Value ("NAV") for the
quarter ended 30 September 2024. The NAV is presented both including and
excluding estimated property disposal and SPV liquidation costs providing
enhanced disclosure. Further details can be found below.

Summary

-        NAV per Ordinary share on a like-for-like basis, including
full provision of portfolio disposal and structure liquidation costs,
decreased by 0.3% to 87.6c (GBp - 73.2p) (30 June 2024: 87.9c (GBp - 74.4p))

 

-        IFRS NAV per Ordinary share, excluding disposal and
liquidation costs, increased 3.4% to 90.9c (GBp - 76.0p) (30 June 2024: 87.9c
(GBp - 74.4p))

 

-        In line with the IFRS NAV, EPRA Net Tangible Assets increased
by 4.2% to 93.5c per Ordinary share (30 June 2024 - 89.7c)

 

-        The portfolio valuation remained stable at €607.45 million
(30 June 2024: €607.35 million)

 

-        The Company partially repaid €2.9 million of its variable
loan with ING Spain and reduced hedging exposure by the same amount. Loan to
Value ('LTV') is 38.2% with fixed debt facilities of €245.6 million at an
average all-in interest rate of 1.99%

 

-        Accretive leasing activity with two new lettings concluded at
Getafe, Spain. Existing tenant MCR has more than doubled its space
requirements relocating into a 16,500 sq metre unit for a 7 year
term. Simultaneously, Molecor signed a 5 year lease for the former MCR unit.

 

Managed Wind-Down

Under the shareholder approved managed wind-down process, the Company's new
investment objective is 'to realise all existing assets in the Company's
portfolio in an orderly manner'.

During the quarter, the Company sought and received court approval to cancel
the full amount standing to the credit of its share premium account. The
amount of Eur 269.5 million has been applied to a special distributable
reserve and will be available for capital distributions as sufficient cash is
generated from asset sales.

On 22 November 2024 approval was granted by Shareholders for the Company to
issue and redeem up to £300 million of B Shares. The Board believes that one
of the fairest and most efficient ways of returning substantial amounts of
cash to Shareholders is by means of a bonus issue of redeemable B Shares (with
a nominal value of one penny each) which would then be immediately redeemed by
the Company in consideration for a cash payment equal to the amount treated as
paid up on the issue of the B Shares.

The quantum and timing of any return(s) of capital to Shareholders under a B
Share Scheme will be at the discretion of the Board and will be dependent on
the realisation of the Company's investments and its liabilities, general
working capital requirements and the amount and nature (from a tax
perspective) of its distributable reserves. The adoption of a B Share scheme
will not limit the ability of the Company to return cash to Shareholders by
using other mechanisms and, if the B Share scheme is adopted, the Board will
continue to review its tax effectiveness and cost efficiency over time. An
initial return of capital is expected by early 2025 at the latest.

The Manager has commenced sales processes for six assets and current
indications are that there is a good level of interest across the range of
quality warehouses that the Company owns. The Manager is in advanced stages
regarding the disposal of three assets with letters of intent expected to be
signed shortly and further details on disposals will be released as these
conclude. Sales processes for a further three assets are due to commence in
early-January.

Net Asset Value Calculation Methodology

Following the shareholder vote against continuation and the approval of the
managed wind-down process, the financial statements in the Half Year Report
published on 26 September 2024, were prepared on a basis other than going
concern. As indicated in the Half Year Report, the Board and the Manager have
discussed the appropriate accounting treatment with the Company's auditor in
advance of the publication of the statutory financial statements for the year
ending 31 December 2024. IFRS offers limited guidance on the preparation of
the financial statements on a basis other than going concern and how this
should differ from those prepared on a going concern basis. In seeking to
provide the most prudent, relevant and reliable financial information to
Shareholders, the Board made provision in the financial statements in the Half
Year Report, for the estimated costs of the disposal of the property
portfolio, the early repayment of bank debt and the winding up of the Company
and its underlying SPVs.

The auditor has advised that, in its opinion, IFRS does not permit the Company
to make provision for the above noted costs. Accordingly,  the audited
financial statements for the year ending 31 December 2024 will not include a
provision in relation to property disposal and SPV liquidation costs. In order
to provide Shareholders with enhanced disclosure, the Company has therefore
prepared its quarterly net asset value both including and excluding
liquidation costs.

Performance

For Q3 2024, the portfolio valuation remained stable at €607.45 million (30
June 2024: €607.35 million).

The independent unaudited external valuation of the Company's property
portfolio undertaken by Savills (UK) Limited increased by €100k, or 0.02%,
in the quarter. The Dutch and Spanish assets saw small increases in aggregate
valuations of 0.1% and 0.2% respectively, Polish and German assets in
aggregate declined in value by 0.2% and 0.5% respectively and there was no
change in the valuation of the Company's French assets.

As at 30 September 2024, the Company's share price was 61.0p, and as at the
date of this announcement the share price was 57.8p.

Leasing

Effective from 15 October 2024, MCR moved from its location at the Company's
Unit 2B asset (7,718 sq metres) in Getafe, Madrid, taking up the tenancy at
the vacant Unit 3A with increased space of 16,500 sq metres. The agreed rent
per annum is €1,039,500 and the lease is for a 7 year term with upward only
CPI movements. MCR's previous lease for Unit 2B had an approaching lease break
in June 2025.

Simultaneously, Molecor, an international company in solutions for
infrastructure, building and waste treatment, has taken up the tenancy at Unit
2B agreeing a 5 year lease with an annual rent per annum of €509,388, with
upward only CPI adjustments.

This accretive leasing activity improves the Company's WAULT and further
enhances the positioning of the portfolio in Getafe, Madrid ahead of a planned
disposal in 2025.

Rent Collection

As at the date of this announcement, 94% of the expected rental income for the
quarter ended 30 September 2024 has been collected. Overall tenants remain
stable and arrears are expected to be collected in due course as new leases
are agreed and signed.

Debt Financing

At the end of the quarter, the Company's fixed rate debt facilities totalled
€245.6 million at an average all-in interest rate of 1.99%, with the
earliest refinancing of debt due in mid-2025. The loan-to-value at period end
was 38.2%.

Interim Dividend

A second interim distribution in respect of the year ending 31 December 2024
of 0.90 euro cents (0.77 pence) was paid to shareholders on 27 September 2024.

The Board today declares a third interim distribution of 1.05 euro cents
(equivalent to 0.87 pence) per Ordinary share, in respect of the year ending
31 December 2024 (2023: 1.41 euro cents), payable in sterling on 31 December
2024 to Ordinary shareholders on the register on 6 December 2024 (ex-dividend
date of 5 December 2024).

Of this third interim distribution declared of 0.87 pence per Ordinary share,
0.50 pence (equivalent to 0.60 euro cents) is declared as dividend income with
0.37 pence (equivalent to 0.45 euro cents) treated as qualifying interest
income.

Breakdown of NAV Movement

Set out below is a breakdown of the change to the unaudited net asset value
per Ordinary Share over the period from 1 July 2024 to 30 September 2024. To
aid shareholder information, the Company has prepared its quarterly unaudited
net asset value both including and excluding the estimated costs of asset
disposals and liquidation of the company structure.

EPRA Net Tangible Assets per share is 93.5 euro cents, which excludes deferred
tax liability.

                                                                               Per share (€ cents)    Attributable assets (€m)    Comment
 Net assets at 30 June 2024 per Company announcement dated 23 August 2024      87.9                   362.4
 including liquidation & disposal costs
 Add back Second Interim Dividend paid on 5 July 2024                          1.4                    5.8
 Net assets as at 30 June 2024 per published Half Year Report including        89.3                   368.2
 liquidation & disposal costs
 Unrealised and realised decrease in valuation of property portfolio           -                      0.1                         Portfolio of 25 assets, capital values of investments remained stable during
                                                                                                                                  the quarter.
 Income earned for the period                                                  2.0                    8.2                         Income from the property portfolio and associated running costs.
 Expenses for the period                                                       (0.9)                  (3.9)
 Deferred tax liability                                                        (0.3)                  (1.4)                       Net deferred tax liability on the difference between book cost and fair value
                                                                                                                                  of the portfolio and other temporary tax differences.
 Interest rate swaps and caps/floors mark to market revaluation                (0.2)                  (0.9)                       Movement in the mark to market value of interest rate swaps.
 First interim dividend paid on 5 July 2024                                    (1.4)                  (5.8)                       First interim dividend 2024 of 1.41 euro cents per Ordinary share
 Second interim dividend paid on 27 September 2024                             (0.9)                  (3.7)                       Second interim dividend 2024 of 0.90 euro cents per Ordinary share
 Foreign currency gain / (loss)                                                -                      0.3                         FX translation
 Net assets at 30 September 2024 including liquidation & disposal costs        87.6                   361.1
 Estimated costs associated with disposal of portfolio and liquidation of the  3.3                    13.7
 Company structure
 Net assets at 30 September 2024 excluding liquidation & disposal costs        90.9                   374.8

 

Net Asset Value analysis as at 30 September 2024 (unaudited)

                                                            €m       % of net assets
 Fair value of Property Portfolio*                          604.1    161.2%
 Cash                                                       20.4     5.4%
 Other Assets                                               18.0     4.8%
 Total Assets                                               642.5    171.4%
 External Debt                                              (243.9)  -65.1%
 Other Liabilities                                          (12.2)   -3.3%
 Deferred tax liability                                     (11.6)   -3.0%
 Total Net Assets excluding liquidation and disposal costs  374.8    100.0%

 

*After lease incentive adjustment.

The NAV per share as at 30 September 2024 is based on 412,174,356 shares of 1
pence each, being the total number of Ordinary shares in issue at that
time. As at the date of this announcement, the Company's share capital
consists of 412,174,356 Ordinary shares with voting rights.

The Board is not aware of any other significant events or transactions which
have occurred between 30 September 2024 and the date of publication of this
statement which would have a material impact on the financial position of the
Company.

Details of the Company and its property portfolio may be found on the
Company's website at: http://www.eurologisticsincome.co.uk

 

 

For further information please contact:

abrdn Fund Managers Limited
 

Ben
Heatley
                    +44 (0) 20 7156 2382

Investec Bank
plc
                +44 (0) 20 7597 4000

David Yovichic

Denis Flanagan

FTI
Consulting
+44 (0) 20 3727 1000

Dido Laurimore

Richard Gotla

Oliver Parsons

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  DIVPPGBUGUPCGRM