REG-Panther Securities: Update on refinance, property valuations and dividend

Panther SecuritiesAnnouncement

26/02/2021 07:05

26 February 2021

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation EU 596/2014 as it forms part of retained EU law
(as defined in the European Union (Withdrawal) Act 2018).

Panther Securities PLC
(the "Company" or the “Group”)

Update on refinance, property valuations and dividend

In the interim results for the six months ended 30 June 2020 published on 16
October 2020, the Chairman stated that the Directors hoped to be in a position
to be able to declare a 6p interim dividend for the year ended 31 December
2020 in February 2021, but that such declaration will be subject to gaining a
clearer understanding of COVID-19 and its financial effects on our Group.

The Directors are now providing an update on the status of the refinancing of
the Group’s banking facilities, the details of an external valuation of the
Group’s properties and the deferment of a decision whether to declare an
interim dividend.

Refinance

As previously announced the Group’s banking facilities were due to expire in
April 2021.  Discussions with our joint lenders (“the Lenders”) have
continued regarding the refinancing of our current facilities.  However, as a
result of COVID these discussions have taken longer to conclude than
anticipated.  The Group is encouraged that one of the joint lenders has
advised that its element of the refinancing has received full credit approval.
However, the other joint lender has advised that its internal processes are
continuing and full credit approval has not yet been obtained.  The Directors
expect to be able to provide confirmation within March 2021 that credit
approval has been obtained from the other joint Lender.  It is anticipated
that a three month extension on the current loan facilities will be provided
to July 2021 (and has been offered by one Lender) to allow time to carry out
the necessary paperwork and any required legal due diligence required by the
Lenders, once the refinancing terms are credit approved by the final Lender.

Property valuation

As part of this refinancing process, an external valuation of the Group’s
charged properties was undertaken by Carter Jonas on behalf of the Lenders. 
The draft valuation of the charged portfolio, consisting of 95 properties
spread over many locations and property uses, came in at £158m.  The
properties’ valuation will remain draft until approved by both of the
Lenders, who have their own in-house property experts to review the valuation
reports.  These same properties were valued by the Directors as at 31
December 2019 at £153m, but since that date the Group has spent circa £2m on
enhancement expenditure. 

Within the investment portfolio, the industrial properties (now representing
29.3% of the charged portfolio’s value) and those with residential planning,
use or potential, showed the largest growth, with our retail investments
having less consistent movements, many with write downs but others holding
value or showing small improvements.

Two currently uncharged properties are also being taken into charge and they
have been valued, on behalf of the Lenders, by Lambert Smith Hampton at an
aggregate value of £3m.

Once the new properties are charged, based on the current borrowing levels and
the draft valuation of the charged portfolio being approved by the Lenders,
the Group is expected to have a loan to value (“LTV”) of below 40% on the
currently drawn £63m.

Based on the draft valuation, together with the properties valued at circa
£12.5m which are uncharged, the Group has a total portfolio with a value of
circa £173.5m.

For the accounts for the year ended 31 December 2020, the final external
valuations will be adopted as year end valuations and the Directors will value
the uncharged properties.  Based on the draft external valuations and the
Directors’ preliminary valuations of the uncharged properties, the Directors
are expecting to see a positive movement in the fair value of the properties
as at 31 December 2020 in the order of £6.1m.  To reiterate shareholders
should be aware that the external valuations remain draft until both of the
Lenders have approved them and therefore remain subject to change.

Swap movements 2020

As shareholders will be aware, the Company has certain interest rate swap
arrangements in place.  The Directors estimate that as at 31 December 2020,
the liability increased by £5.5m and this non-cash item will be reflected in
the results for the year ended 31 December 2020 (as well as the positive
valuation movement on the investment properties).

Swap restructuring

The Group has paid £5m in February 2021 to vary a long-term swap agreement. 
The agreement varied was an interest rate swap fixed at 5.06% until 31 August
2038 on a nominal value of £35m and has circa 17.5 years remaining. 
Following the variation, the Group’s fixed rate will drop on 1 September
2023 to 3.40% saving the Group £581,000pa in cash flow until the end point of
the instrument.

Property purchase

In late January 2021, the Group exchanged contracts to purchase an industrial
building in Trowbridge for £3.3m, paying a 5% deposit.  Completion is at a
time of the seller’s option with the earliest date being 15 months and the
latest being 30 months from exchange.  The seller also has the ability to
take a leaseback at completion at a market rent.  The industrial unit is well
located and is a 96,000sq ft building on circa six acres of land.

COVID-19 and dividend update

The Directors announced in October 2020 that they would be declaring a
dividend in February 2021 once they had a clearer understanding of the
financial effects of COVID-19. 

The Directors consider that it is prudent to wait until full credit approval
has been obtained for the refinancing and the negotiated terms of the
refinancing are confirmed before declaring any dividend.  However, the
Directors can confirm that the Group is collecting approximately 80% of its
invoiced income (based on invoices issued since the first lock down on 23
March 2020).

A further announcement will be made in due course.

For further information:

 Panther Securities plc: Andrew Perloff/ Simon Peters                             Tel: 01707 667 300 
 Allenby Capital Limited (Nomad and Joint Broker) David Worlidge/ Alex Brearley   Tel: 020 3328 5656 



Copyright (c) 2021 PR Newswire Association,LLC. All Rights Reserved