TIDMWICH TIDMRDF
RNS Number : 6156M
Wichford plc
19 August 2011
Wichford P.L.C.
("Wichford" or the "Company")
Interim Management Statement
19 August 2011
The Board of Wichford P.L.C., the property investment company,
today issues the following Interim Management Statement relating to
the period 1 April 2011 to 18 August 2011.
Overview
The second half of the financial year has been focused on the
merger with Redefine International plc ("Redefine") and it is
pleasing to have received strong shareholder support with all
resolutions receiving over 99% of the votes cast in favour of the
transaction at the Extraordinary General Meeting ("EGM") held on
the 4 August 2011. Further details are contained below.
The covenant strength of our predominantly government tenant
base continues to produce stable cashflows and trading performance
has remained robust. The implementation of the UK Government's
comprehensive spending review and generally weak occupier demand in
most regional centres has, however, placed increased risk on lease
renewals and re-lettings. Asset management activities in the period
focussed on protecting current and future occupancy.
Property Portfolio
Asset management initiatives
Lyon House and Equitable House, Harrow
The Company remains on track to submit a full planning
application for a residential mixed-use scheme of approximately
250,000 sq ft on the former HMRC occupied site. Discussions with
the London Borough of Harrow and Design for London are progressing
in line with expectations. Subject to further consultations with
local stakeholders, the Company anticipates submitting a planning
application in the coming months.
Ongoing discussions to secure a Registered Social Landlord for
the affordable housing element of the scheme are at an advanced
stage. A development agreement for approximately 70,000 sq ft of
affordable accommodation is anticipated to be concluded before
submitting the planning application.
Sapphire House, Telford
The lease to Tatung (UK) Limited, with a remaining term of six
years, has been surrendered in return for a tenant's surrender
premium of GBP5.0 million and the transfer of all rights against
the outgoing sub-tenant (MoD) for dilapidations liabilities.
Occupancy
Occupancy weakened to 93.3% (March 2011: 96.2%), largely as a
result of the lease surrender negotiated at Telford. In addition,
the non-renewal of some smaller office units and the anticipated
vacancy of two floors at Coventry Road, Birmingham contributed to
the decrease in occupancy. The above occupancy rate includes the
vacant space at Equitable House and Lyon House, Harrow which is no
longer available to let as the site is being prepared for
redevelopment. Occupancy excluding Equitable House and Lyon House
stands at 96.5% (March 2011: 98.8%).
Rent Reviews
The proportion of the portfolio subject to CPI / RPI indexation
or fixed increases remained broadly unchanged at 62.8%. Inflation
in the UK remains well above the Bank of England's 2.0% target
benefitting rent reviews subject to CPI or RPI.
The following rent reviews were settled or are in the process of
being agreed:
-- Aberdeen - open market review agreed and completed at
GBP510,000 p.a. up from GBP478,250 p.a., reflecting an increase of
6.6%
-- Bradford - RPI rent review with anticipated increase from
GBP1,750,000 p.a. to GBP2,009,656 p.a., representing a 14.8%
uplift
There have been no acquisitions or disposals in the period since
31 March 2011.
Cash Position and Dividend
The interim dividend of 0.32 pence per share totaling GBP3.40
million was paid on 29 June 2011 to all shareholders on the
register on 3 June 2011.
As at the date of this announcement the Company has
approximately GBP36.0 million of available cash.
Debt Facilities
VBG2 Facility
Following the maturity of the VBG 2 facility in April 2011, the
borrowers have agreed to a Standstill Agreement with the facility
servicer and are currently exploring opportunities for a consensual
sales process. This is in line with the previously communicated
strategy to pursue opportunities for an orderly exit from
Continental Europe.
A potential sale would remove the existing negative net asset
value position of approximately GBP10.1 million (approximately
0.95p per share) without any negative impact on cashflows as all
rental income is currently utilised to meet property expenses,
interest and principal debt repayments.
The EUR52.8 million outstanding on this facility is secured
against two German properties in Cologne and Stuttgart.
Merger
The boards of Wichford and Redefine announced on 13 July 2011
that they had reached agreement on the terms of a recommended all
share offer to be made by Wichford for the entire issued and to be
issued ordinary share capital of Redefine.
All of the resolutions in connection with the merger and
proposed at the EGM held on 4 August 2011 were passed without
amendment by the required majority. Full results of the EGM are
available on the Company website www.wichford.com
On 18 August 2011 Redefine Properties International Limited
("RIN"), the company listed on the Johannesburg Stock Exchange
which owns 82% of the issued share capital of Redefine, announced
that at a general meeting of linked unitholders held on that day,
all the special and ordinary resolutions in connection with the
merger were passed unanimously. RIN will now notify Wichford of its
acceptance of the Offer. A copy of the announcement can be found on
the Company website www.wichford.com
The admission of the enlarged company to the main market of the
London Stock Exchange is expected to take place on 23 August 2011
subject to all necessary regulatory and admission requirements
being met.
The following ISIN, TIDIM and SEDOL references will be
adopted:
ISIN: IM00B4JZYL28
TIDIM: RDI
SEDOL: B4JZYL2
Redefine intends to cancel its admission to trading on AIM which
is expected to become effective on 8 September 2011. Following the
cancellation of Redefine's AIM admission, the Company will change
its name to Redefine International P.L.C.
Outlook
Occupier and investment demand for regional office assets is
likely to remain subdued with pressures on public sector budgets
and individuals' disposable incomes set to continue. The focus
remains on protecting occupancy and rental income and repositioning
assets with better alternative uses, or disposing of those assets
with limited growth potential.
The merger with Redefine will enhance the Company's ability to
support this strategy with a larger, well diversified asset base
and the support and capital commitment from its largest
shareholder.
Philippe de Nicolay, Chairman of Wichford commented:
"I am pleased that shareholders have voted in support of the
merger with Redefine. Following a detailed strategic review, the
Board believes the merger will create an enlarged, income-focused
property company with a diversified property portfolio and an
improved capital structure. The merger includes a significant
capital commitment from Redefine Properties International Limited
reflecting their support for the enlarged company."
For further details, please contact,
Wichford P.L.C.
Philippe de Nicolay 00 33 1 40 74 42 79
Wichford Property Management
Ltd
Mike Watters 020 7811 0100
Stephen Oakenfull 020 7811 0100
Citigate Dewe Rogerson 020 7638 9571
Toby Mountford
Kate Lehane
Wichford P.L.C. (UK Listed: WICH) is a property investment
company, with a portfolio focused on investment property occupied
primarily by Central and State Government bodies. Over three
quarters of the portfolio comprises public sector rented properties
in the UK with the remainder in Germany and the Netherlands.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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