Ediston Prop Inv - Net Asset Value(s)
28/07/2022 07:00
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RNS Number : 9635T Ediston Property Inv Comp PLC 28 July 2022
Ediston Property Investment Company plc
(LEI: 213800JRL87EGX9TUI28)
Net Asset Value ('NAV') as at 30 June 2022
And Trading Update
Ediston Property Investment Company plc (LSE: EPIC) (the 'Company') announces
its unaudited NAV at 30 June 2022.
Quarter Summary
· NAV per share at 30 June 2022 of 98.35 pence (31 March 2022: 96.08
pence), an increase of 2.4% in the quarter.
· Fifth consecutive quarter of NAV growth.
· Fair value independent valuation of the property portfolio at 30 June
2022 of £242.45 million, a like-for-like increase of 2.7% on the valuation at
31 March 2022.
· NAV total return (including dividends) for the quarter of 3.7% (31
March 2022: 7.4%).
· NAV total return of 19.0% for the year ended 30 June 2022.
· Portfolio weighted average unexpired lease length of 4.6 years and
EPRA vacancy rate of 6.4%.
· Dividend paid in the quarter of 1.25 pence per share.
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· Post period end sold the last remaining non-retail warehouse asset
for £5.0 million, 67% ahead of the 31 March 2022 valuation.
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Net Asset Value
The unaudited NAV of the Company at 30 June 2022 was £207.82 million, or
98.35 pence per share, an increase of 2.4% on the Company's NAV per share as
at 31 March 2022.
Pence Per Share £ million
NAV at 31 March 2022 96.08 203.05
Valuation of retained property portfolio 2.60 5.48
Reduction in value of the property portfolio as a result of Hartlepool sale (0.95) (2.01)
Sale proceeds 1.24 2.62
Capital expenditure (0.59) (1.26)
Income earned 1.86 3.93
Expenses & finance costs (0.64) (1.35)
Dividends paid (1.25) (2.64)
NAV at 30 June 2022 98.35 207.82
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 June 2022
and undistributed income for the quarter, but does not include a provision for
any accrued monthly dividend.
Investment and asset management activity
In April, the Company sold its leisure asset at the Lanyard, Hartlepool for a
price of £2.6 million, which was 16.4% above the 31 December 2021 valuation.
Prior to the sale, the Investment Manager had completed a lease extension with
the tenant, Mecca Bingo Limited, which extended the unexpired lease term by
seven years.
As announced on 5 July 2022, the Company sold its leisure unit at Southwater
Square, Telford, its final non-retail warehouse property, for £5.0 million, a
67% premium to the 31 March 2022 valuation. The impact of the sale is included
in this NAV.
Post period end, at Coatbridge, Glasgow, the Investment Manager completed an
Agreement for Lease (AFL) with existing tenant B&Q, to secure them on the
park for a further 10-years. B&Q had a lease expiry in December this year.
As part of the transaction, B&Q will downsize from 102,000 sq. ft. to
79,960 sq. ft. Aldi, has signed an AFL for a 20,000 sq. ft. unit which will be
created in the space vacated by B&Q. Planning permission has been obtained
for the change to food use. On completion of the landlord works, Aldi will
enter into a 20-year lease without break, subject to five-yearly rent reviews
linked to RPI. This transaction has not been reflected in the NAV as at 30
June 2022.
This transaction follows the construction of two drive-thru pods in 2020,
which are let to Burger King and Costa Coffee and will complete the transition
of the park from a single-let DIY asset to a multi-let retail park with both
food and coffee operators.
The Investment Manager is progressing other new acquisitions, lettings and
lease restructures across the portfolio, which will further improve the
Company's income stream. These will be reported on when completed.
Cash and debt
At the date of this announcement, the Company has approximately £50.7 million
of cash available for investment and operational purposes. The Company also
has £31.0 million of cash held in its debt facility, which is subject to the
lender's LTV requirements being met for it to be released for investment
purposes. These figures include the Hartlepool and Telford sale proceeds.
At the date of the June valuation, the average loan-to-value across the
Company's two debt facilities was 33.1%. The Company is fully compliant with
all debt covenants and has significant headroom against income and asset value
covenants.
Summary
The Company has seen a fifth consecutive quarter of NAV growth, driven by the
continued valuation improvement of the retail warehouse portfolio, and the
sale above valuation of the Telford leisure asset.
Whilst the cost-of-living crisis and inflationary pressures may create
headwinds for the retail sector in the short-term, the Investment Manager and
Board do not consider this will change the positive fundamentals of the retail
warehouse sector. It is expected to continue to be the most resilient and
flexible part of the retail market, which can adapt to the changing needs of
tenants and the integration of their omnichannel strategies.
According to the IPF Consensus Forecast, published in May 2022, the retail
warehouse sector is forecast to be the top performing sub-sector, on a total
return basis, over the period 2022 to 2026.
The Investment Manager is continuing to pursue opportunities in both the
investment and occupational markets that are expected to benefit the Company
on both a capital and income basis.
Portfolio sector weightings and tenant and locational exposure as at 30 June
2022
Sector
Sector Exposure (%)
Retail warehouse 97.9
Other commercial/ leisure 2.1
As at 30 June 2022, the 'other commercial/ leisure' exposure is Telford. Post
period end, following the sale of the Telford leisure unit, the Company only
holds retail warehouse assets.
Geography
The portfolio is diversified across the regional markets.
Region Exposure (%)
Scotland 26.1
Wales 25.9
North West 16.7
Yorkshire 15.1
North East 8.0
East Midlands 6.2
West Midlands 2.0
Top five tenants (contracted income) 30 June
2022
Tenant Exposure (%)
B&Q Limited 14.7
B&M Retail Limited 7.7
Marks & Spencer plc 7.5
Boots UK Limited 4.6
Pets at Home Limited 3.8
Forthcoming events
The next interim dividend announcement is expected to be made by 4 August
2022. The next scheduled independent quarterly valuation of the property
portfolio will be conducted by Knight Frank LLP for 30 September 2022, the
Company's year end. The unaudited NAV per share at that date is expected to be
announced in October 2022.
The Company intends to publish its next factsheet shortly which will be made
available on the Company's website at www.ediston-reit.com
(http://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
Calum Bruce - Ediston Investment Services 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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