Phoenix Spree Deutschland Limited Covid-19 Business Update (3169M)
11 Mayo 2020 - 1:00AM
UK Regulatory
TIDMPSDL
RNS Number : 3169M
Phoenix Spree Deutschland Limited
11 May 2020
11 May 2020
Phoenix Spree Deutschland Limited
("PSD" or the "Company")
COVID-19 Business Update
Phoenix Spree Deutschland Limited (LSE: PSDL.LN), the UK listed
investment company specialising in German residential real estate,
announces an update on the impact of COVID-19 on business
operations.
Supporting our stakeholders
The Company's overriding priority is the health and wellbeing of
its tenants, work colleagues and wider stakeholders throughout this
period of unprecedented disruption. On 20 April 2020 the German
government announced plans to begin to lift restrictions imposed on
business and public life caused by the COVID-19 pandemic, becoming
one of the first major European nations to commence the task of
reopening.
Where necessary, the Company continues to support its tenants,
both residential and commercial, through agreeing, on a
case-by-case basis, the payment of monthly rents or deferring
rental payments.
Limited impact on rent collection
To date, the impact on rent collection has been limited. In the
month to 30 April 2020, 98% of rent due had been collected in total
compared to 99% in January 2020.
Residential rent collection has remained particularly resilient,
with over 99% of rent collected during the month of April.
Germany's Hartz IV welfare programme includes help for rental
payments in instances of financial hardship and is available to
tenants impacted by the COVID-19 outbreak.
Commercial rents represent a small proportion of total rents,
accounting for only 10% of rental income as of 30 April 2020. The
COVID-19 restrictions involved the temporary closure of many
commercial businesses, including a number of our commercial
tenants. Following the latest German COVID-19 guidance on easing
restrictions, many businesses are now in the process of reopening.
During the month of April 2020, 89% of commercial rents have been
collected, compared with 96% in January 2020.
The Company will continue to work sensitively, and on a
case-by-case basis, with its tenants in arrears to agree
appropriate and workable repayment schedules.
Successful refinancing on attractive terms, strong financial
position
The Company is pleased to announce that on 8 May 2020 it
refinanced the EUR16.4m of debt acquired as part of the share deal
acquisition of the apartment complex in Brandenburg in December
2019. It was refinanced with a EUR20.3m facility using the
acquisition facility negotiated with Natixis in September 2019. The
new loan was signed on improved terms with an extended duration and
lower interest rate. On completion of this refinance, the Company
had gross borrowings of EUR283.0m and cash balances of EUR41.6m,
resulting in net debt of EUR241.4 million and a net loan to value
on the Portfolio of 33.1%.
As outlined in detail in the Annual Report, the Property Advisor
has rigorously stress tested the potential downside scenarios
associated with the Mietendeckel and COVID-19, including any
potential impact on arrears and loan covenants. The Board is
confident that the Company's liquidity and strong balance sheet
leave it well placed to withstand any negative impact from the
current short-term challenges.
Dividend and Outlook
As previously announced, the Company has declared an unchanged
second dividend of 5.15 cents (EUR) per share, which is expected to
be paid on or around 3 July 2020 to shareholders on the register at
close of business on 12 June 2020, with an ex-dividend date of 11
June 2020.
Ahead of the lifting of restrictions imposed as a result of the
COVID-19 pandemic, rent collection has remained resilient. Whilst
there currently remains uncertainty surrounding the legality of the
new Berlin Mietendeckel and the duration of legal challenges, PSD
is well positioned to mitigate the financial impact pending legal
clarification. On 6 May 2020, the parliamentary groups of the
CDU/CSU and FDP of the Deutsche Bundestag officially filed for a
judicial review of the Mietendeckel legislation at the federal
constitutional court in Karlsruhe.
The Board remains confident in the long-term outlook for PSD,
particularly given the strength of demand for housing in Berlin.
The Company is due to announce its results for the half-year to 30
June 2020 in early September, and will provide further updates in
the interim in the event that conditions substantially change as a
consequence of COVID-19.
Robert Hingley, Chairman of Phoenix Spree Deutschland,
commented:
"We have continued to focus on our top priorities of the safety
and wellbeing of our tenants, suppliers and other key stakeholders.
The business has shown its resilience throughout these
unprecedented times and, although German COVID-19 restrictions are
now in the process of being lifted, the Portfolio is well prepared
for a protracted period of disruption should this arise. Recent
legal developments challenging the legality of the Mietendeckel
have been positive and our balance sheet strength and liquidity
mean the Company is well positioned to weather any impact from both
COVID-19 and the Mietendeckel until such time as market conditions
normalise."
For further information, please contact:
Phoenix Spree Deutschland Limited
Stuart Young +44 (0)20 3937 8760
Numis Securities Limited (Corporate Broker)
David Benda +44 (0)20 3100 2222
Tulchan Communications (Financial PR)
Elizabeth Snow
Amber Ahluwalia +44 (0)20 7353 4200
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END
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