RNS Number : 2953B
Warner Estate Holdings PLC
14 August 2008
Warner Estate Holdings PLC ("Warner Estate" or "Group")
Interim Management Statement
Warner Estate announces that its recurring profit for the year to date is ahead of the
equivalent period in 2007 and in line with
expectations for the current year.
The main highlights of this period have been:
* Ashtenne Industrial Fund (AIF) and our management contract extended to 2016.
* Four disposals during the year to date, totalling £10million, averaged 96% of 31
March 2008 values;
* Cash collection remains strong with 98% of rents collected within 28 days of the
June quarter end;
* £60million of revolving borrowing facilities renewed for three years and the loan
to value covenant on a further £100million of
facilities increased to 80%;
* Annualised savings now running at £1.5million p.a. against £0.7million reported in
June.
Business Review:
As with the rest of the property sector we cannot ignore the challenges that the business
faces from deteriorating property values.
But, we are managing actively all those aspects which are within our control.
The Group's profitability is in line with expectations and cash collection remains strong. This is being driven by active asset
management, cost savings and other profit initiatives. Since March, void units have been let
at 4% above ERV at £2million p.a. which has
replaced leases which have expired and not been renewed of £1.95million p.a. Rent reviews and
lease renewals have been concluded at
£4.16million p.a., 3.7% above ERV, and 8.3% above the previous rent. Cost savings and other
initiatives have also improved profitability
and we now anticipate annualised savings of £1.5million p.a. against £0.7million reported at
the 2008 Full Year Results' presentation in
June. These annualised savings represent over 10% of the Group's 2008 asset management and
administrative expenses.
Cash collection remains strong with 98% of rents collected within 28 days of the June
quarter end. This ensures that the Group has and
continues to have a strong cash flow with which to meet its obligations and service its debt.
Whilst the deterioration in the general
economy may impact on future profitability, the strength and breadth of our business is such
that we are not exposed to any particular
sector or tenant.
With continuing pressure on valuations, action has been and is being taken to ensure that
any potential impact is addressed within the
Group, Joint Ventures and the Funds, all of which remain compliant with their loan to value
covenants.
Property:
In July, the investors in AIF formally approved the extension of this fund and of our
management contract for a further five years to
2016.
Against a background of uncertainty, our focus remains on delivering the asset management
basics. This is something which is, we
believe, a key strength of Warner Estate. Expansion of our asset management business remains
an objective and we are engaged in discussions
on our joint ventures with third party investors.
Rental income and void rates remain in line with our expectations. Our proximity to our
tenants has allowed us to increase our cash
collection rates and manage voids with no material increase in tenant defaults. In line with
our budget, we have found voids relating to
retail tenants, arising from short term lettings, more challenging to fill during the period.
We continue with our selective disposal programme of both property and other assets.
Agora Max, our joint venture with HBoS, has received notice from Birmingham City Council
to compulsory purchase the Pallasades Shopping
Centre.
Finance:
Although net borrowings at £352million are marginally higher than 31 March 2008
(£347million), this follows an injection of £7million
into the Group's joint venture, Agora Max, and a significant reduction in creditors of
£8million. Furthermore, the borrowing does not
reflect disposal proceeds, currently due, of over £8million.
In addition to renewing some £60million of Group revolving facilities and increasing the
loan to value covenant on another £100million
of facilities to 80%, the Group has hedged out a further £25million of debt at 4.4% for 25
years on three year calls commencing in December
2008. In the Apia Regional Office Fund, the loan to value covenant has been increased by 5%
to 65%.
- ends -
Date: 14 August 2008
Warner Estate Holdings PLC City Profile
Philip Warner, Chairman Jonathan Gillen
Peter Collins, Finance Director William Attwell
Michael Stevens, Property Director Tel: 020-7448-3244
Tel: 020-7907-5100
Web: www.warnerestate.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
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