TIDMEPIC
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 GBP242.45 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 GBP5.0 million, 67% ahead of the 31 March 2022
valuation.
--------------------------------------------------------------------------------------
Net Asset Value
The unaudited NAV of the Company at 30 June 2022 was GBP207.82
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 GBP million
Share
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 GBP2.6 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 GBP5.0 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
GBP50.7 million of cash available for investment and operational
purposes. The Company also has GBP31.0 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.
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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END
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