abrdn European Logistics Income
plc
Unaudited Net Asset Value as at 30 June
2024 and declaration of Second Interim Dividend
23 August 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 June 2024.
Summary
-
On 24 June 2024, on recommendation of the Board, shareholders voted
against the continuation of the Company and on 23 July 2024
approved a new Investment Policy to implement a managed wind-down
of the Company. Following these meetings, the Company no longer
prepares its net asset value on the going concern basis of
accounting
-
NAV per Ordinary share decreased by 4.2% to 87.9c (GBp - 74.4p) (31
March 2024: 91.8c (GBp - 78.5p)) with the decrease largely
attributable to the recognition of the estimated costs of realising
the portfolio. Excluding these costs, the NAV per Ordinary share
decrease was 0.6%
-
EPRA Net Tangible Assets decreased by 4.3% to 89.7c per Ordinary
share (31 March 2024 - 93.7c)
-
The portfolio valuation itself increased 0.17% to €607.35 million
(31 March 2024: €606.29 million), as asset values in aggregate
stabilised
-
Loan to Value ('LTV') is 39.0% - fixed debt facilities totalled
€248.5 million at an average all-in interest rate of 2.0%, with no
major refinancings until mid-2025
-
Following the quarter end, the Company partially repaid €2.9
million of the variable loan with ING Spain and reduced the hedging
exposure by the same amount. The repayment reduced the LTV to 38.7%
and the all-in interest rate to 1.99%.
Introduction
On 20 May 2024, following a detailed review of
the options available to the Company and after consultation with
its advisers, as well as taking into account feedback received from
a number of larger shareholders, the Board announced its conclusion
that it would be in the best interests of shareholders as a whole
to put forward a proposal for a managed wind-down of the
Company.
As part of the detailed strategic review, the
Company's investment manager provided the Board with analysis of,
and a proposal involving, a managed disposal of the portfolio in a
timely manner. The analysis comprised a range of detailed disposal
scenarios for the entire portfolio over an illustrative period of
12-24 months. It also considered the impact of likely disposal
costs, local applicable capital gains taxes, the ongoing running
costs of the Company and the optimal approach to repaying or
maximising the value of the Company's fixed cost debt.
On 24 June 2024, on the recommendation of the
Board, shareholders voted against the continuation of the Company
and on 23 July 2024 voted overwhelmingly in favour to approve a new
Investment Policy to implement a managed wind-down of the
Company.
Under the 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'.
Sales will be managed with the intention of
realising all the assets held in the portfolio in an orderly manner
and with a view to repaying borrowings and making timely returns of
capital to shareholders whilst aiming to obtain the best achievable
value for the Company's assets at the time of their realisations.
Realisations may take the form of disposals of single assets,
groups of assets or the portfolio as a whole.
The Company will seek to return cash to
shareholders in an efficient and fair manner that accounts for,
among other things, the UK tax consequences for shareholders and
the composition of the Company's shareholder register.
Following shareholder approval in July, the
Company is seeking court approval to cancel the full amount
standing to the credit of its share premium account. When approved,
the amount of £269.5 million may be applied to a special
distributable reserve and will be available for capital
distributions. An initial return of capital is expected by early
2025 at the latest.
The Manager is in the process of arranging
several assets for the sales process and current indications are
that there is a good level of interest across the range of quality
warehouses that the Company owns.
Following the shareholder vote against
continuation and the approval of the managed wind-down process, the
Company no longer prepares its net asset value on the going concern
basis of accounting.
As a result, the NAV per Ordinary share
decreased by 4.2% to 87.9c (GBp - 74.4p) (31 March 2024: 91.8c (GBp
- 78.5p)). This decrease was largely attributable to the
requirement to recognise estimated costs of realising the
portfolio. Excluding these costs and associated deferred tax
liability impact, the NAV per Ordinary share decrease was
0.6%.
For Q2 2024, the portfolio valuation itself
increased 0.17% to €607.35 million (31 March 2024: €606.29
million), as asset values started to stabilise.
Performance
The independent unaudited external valuation of
the Company's property portfolio undertaken by Savills (UK) Limited
increased by €1 million, or 0.17%, in the quarter. The Dutch,
Spanish and French assets witnessed increases (1.8%, 0.3% and 0.1%
respectively) and Poland and Germany saw declines in value (-2.2%
and -1.6% respectively).
For the six months ended 30 June 2024, the
Company's net asset value total return with quarterly distributions
reinvested was -4.3% in Euro terms (-5.9% in sterling terms).
Excluding costs associated with realisation of the portfolio, these
returns were -0.8% in Euro terms (-2.9% in sterling
terms).
As at 30 June 2024, the Company's share price
was 60.0p, and as at the date of this announcement the share price
was 62.0p.
Rent
Collection
As at the date of this announcement, 93% of the
expected rental income for the quarter ended 30 June 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 €248.5 million at an average all-in
interest rate of 2.0%, with the earliest refinancing of debt in
mid-2025. The loan-to-value was 39.0%. The increase in LTV is
largely attributable to the reduction in portfolio value due to the
recognition of estimated disposal costs. Excluding these
provisions, the LTV was 38.2%.
Subsequent to the end of the quarter, the
Company partially repaid €2.9 million of the variable loan with ING
Spain in July 2024 and reduced the hedging exposure by the same
amount. The repayment reduced the LTV to 38.7% (38.0% excluding
costs associated with realisation of the portfolio) and the all-in
interest rate to 1.99%.
Interim
Dividend
A first interim distribution in respect of the
year ending 31 December 2024 of 1.41c was paid to shareholders on 5
July 2024.
In line with previous communications, the
distributions made to date have been materially uncovered by
ongoing earnings and this in part led to the strategic review that
was undertaken by the Board. In addition, as the asset
disposal programme commences, the rental income generated by the
Company's portfolio will diminish further. As a result, the
Company's ability to maintain the level and frequency of
distributions will also decrease as the sale programme progresses.
Distributions will still be required, however, to ensure that the
Company's investment trust status is maintained through the process
and may take the form of either dividend income or "qualifying
interest income" which may be designated as an interest
distribution for UK tax purposes and therefore subject to the
interest streaming regime applicable to investments
trusts.
With this in mind, the
Board has moved to paying a distribution covered by income earned
and expenses paid or accrued (excluding accounting provisions in
relation to liquidation costs under the non-going concern basis)
for the relevant quarter and has today declared a second interim
distribution of 0.90 euro cents (equivalent to 0.77 pence) per
Ordinary share, in respect of the year ending 31 December 2024
(2023: 1.41 euro cents), payable in sterling on 27 September 2024
to Ordinary shareholders on the register on 6 September 2024
(ex-dividend date of 5 September 2024).
Of this second interim distribution
declared of 0.77 pence per Ordinary share, 0.67 pence (equivalent
to 0.78 euro cents) is declared as dividend income with 0.10 pence
(equivalent to 0.12 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 April 2024 to 30 June 2024. The unaudited net asset value has been
prepared on a break-up basis, under International Financial
Reporting Standards ("IFRS").
EPRA Net Tangible Assets per share is 89.7 euro
cents, which excludes deferred tax liability.
|
|
Per Share
(€ cents)
|
Attributable
Assets (€m)
|
Comment
|
|
Net assets as at 31 March 2024
|
91.8
|
378.4
|
|
|
Unrealised decrease in valuation of property
portfolio.
|
(2.7)
|
(11.2)
|
Portfolio of 25 assets - capital values
increased by 0.17% over the quarter.
The loss recognised in the NAV is related to the
provision for disposal costs of €12.5m.
|
|
Income earned for the period
|
1.9
|
8.0
|
Income from the property portfolio and
associated running costs.
Includes adjustments related to the non-going
concern basis of accounting namely, liquidation of the structure
and early repayment of debt of €1.1m and accounting adjustment for
reversal of unamortised financing cost of €2.1m.
|
|
Expenses for the period
|
(1.7)
|
(7.2)
|
|
Deferred tax liability
|
0.3
|
1.1
|
Net deferred tax liability on the difference
between book cost and net realisable value of the
portfolio
|
|
Interest rate swaps and caps/floors mark to
market revaluation
|
(0.1)
|
(0.3)
|
Movement in the mark to market value of interest
rate swaps and options hedge.
|
|
Dividend declared 23 May 2024 and paid 5 July
2024
|
(1.4)
|
(5.8)
|
First interim dividend for 2024 of 1.41 euro
cents per Ordinary share.
|
|
Other movements in reserves
|
(0.2)
|
(0.6)
|
FX translation
|
|
Net assets as
at 30 June 2024
|
87.9
|
362.4
|
|
Net Asset Value
analysis as at 30 June 2024 (unaudited)
|
|
€m
|
% of net
assets
|
|
Net
realisable value of Property Portfolio*
|
591.6
|
163.2%
|
|
Cash
|
26.6
|
7.3%
|
|
Other Assets
|
19.3
|
5.3%
|
|
Total Assets
|
637.5
|
175.8%
|
|
External Debt
|
(248.5)
|
-68.6%
|
|
Other Liabilities
|
(17.3)
|
-4.7%
|
|
Deferred tax liability
|
(9.3)
|
-2.5%
|
|
Total Net Assets
|
362.4
|
100.0%
|
*After lease incentive adjustment and deduction
of disposal costs.
The NAV per share as at 30 June 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 June 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