TIDMLSR
RNS Number : 6617D
Local Shopping REIT (The) PLC
11 October 2018
FOR IMMEDIATE RELEASE
The Local Shopping REIT plc (the "Company")
Update on Property Sales Programme
and Estimate of Net Realisable Value
10 October 2018
The board of The Local Shopping REIT plc ("the Board") is
pleased to provide the following update on progress with its
property sales programme.
Since the last update, the Company has sold or exchanged
contracts for sale on 36 properties for an aggregate price of
GBP5.8 million, representing a 1.1% premium to carrying value
before sales costs.
Of these, 20 properties (including a 14-asset portfolio) were
sold by private treaty transactions which completed or exchanged
for an aggregate sale price of GBP2.2 million, representing a 0.6%
discount to carrying value before sales costs.
The other 16 properties exchanged in recent auctions, primarily
in September. The aggregate sale price of these was GBP3.6 million,
representing a 2.1% premium to carrying value before sales costs.
Two of these auction sales have since completed.
The aggregate sales costs associated with all the disposals
described above is estimated to be circa 4.0% of the aggregate
sales price, resulting in an aggregate realised loss on sale of
circa 2.9%.
The proceeds of the asset sales have been used to repay bank
debt, which was thereby eliminated in full during July 2018,
achieving an important milestone in the Company's investment
policy.
Currently, the company has GBP3.2 million in cash reserves and
sales on which contracts have been exchanged are expected to
generate a further GBP13.8 million in net sales proceeds.
Excluding properties on which we have exchanged contracts for
sale, the portfolio comprises 42 properties with an aggregate
carrying value of GBP13.6 million. We are now focussed on the
disposal of these remaining assets.
To this end, we are progressing a number of private treaty sales
and have agreed terms, subject to contract, on 10 properties with
an aggregate carrying value of GBP3.1 million.
This leaves 32 properties with an aggregate carrying value of
GBP10.5 million. We will continue to market these as individual
assets and small portfolios, both in the private treaty market and
by auction, during the remainder of the calendar year.
Approximately half of these properties are scheduled for auction in
October.
The Board expects to provide a further market update following
the October auctions.
The Board considers that progress towards achieving the
Company's investment objective is now such that it is appropriate
to provide an estimate of the net realisable value of the Company's
shares available for distribution to shareholders in due
course.
It is the opinion of the Board that the net realisable value
will be between 33.0 and 34.5 pence per share.
In estimating this figure, which has not been audited, the Board
has taken note of:
- estimated property sales (completed, contracted, under offer & forecast);
- property sales costs and associated accounting write-downs
(for example, capitalised rent frees and other non-cash items);
- actual and forecast operating performance;
- actual and forecast capital expenditure requirements;
- estimated corporate wind-up costs;
- irrecoverable VAT.
The Board is currently considering the optimum route for
returning cash to shareholders, which will aim to be both as rapid
and as cost effective as possible. That, together with an
indicative timetable, will be made available as soon as
practicable.
The net realisable value figures in this announcement are
estimated and are based on unaudited estimated values. The net
realisable value estimate should only be taken as an indicative
value which has been provided for information only and no reliance
should be placed on it. There are a number of significant risks
associated with the estimated figures, for example, as a
consequence of (i) general market conditions relating to investment
property; (ii) the sales performance of the Company's remaining
property portfolio; (iii) the speed of execution (in order to
curtail corporate overhead costs); and (iv) the extent of any
corporate costs. Estimated results, performance or achievements may
therefore differ materially from any actual results, performance or
achievements. The term "carrying value" used in this announcement
refers to the property values comprised in the Company's unaudited
accounts as at 31 March 2018.
Except as required by applicable law, the Company expressly
disclaims any obligations to update or revise such estimates to
reflect any change in expectations, new information, subsequent
events or otherwise.
This document is for information purposes only and is not an
offer to invest. All investments are subject to risk and past
performance is no guarantee of future returns. Prospective
investors are advised to seek expert legal, financial, tax and
other professional advice before making any investment
decisions.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 ("MAR"). Upon the
publication of this announcement, the inside information is now
considered to be in the public domain for the purposes of MAR.
The person responsible for making this announcement is William
Heaney, Company Secretary.
[ENDS]
Enquiries:
Rupert Wallman, Fund Manager +44 20 7355 8800
Bill Heaney, Company Secretary +44 20 7355 8800
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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