Ediston Property Inv Comp PLC Net Asset Value as at 31 March 2017 (1830D)

TIDMEPIC

RNS Number : 1830D

Ediston Property Inv Comp PLC

25 April 2017

Ediston Property Investment Company plc

(LEI: 213800JRL87EGX9TUI28)

Net Asset Value ("NAV") as at 31 March 2017

Ediston Property Investment Company plc (LSE: EPIC) (the "Company") announces its unaudited NAV as at 31 March 2017.

Quarter highlights

-- NAV per share at 31 March 2017 of 109.67 pence (31 December 2016: 108.31 pence), an increase of 1.26%, resulting in a NAV total return (including dividends) of 2.53% for the quarter

-- Fair value independent valuation of the property portfolio as at 31 March 2017 of GBP184.74 million, a 1.10% increase on the valuation at 31 December 2016

   --     The delivery of successful asset management initiatives helped increase the valuation 

-- Annualised dividend yield of 5.06% based on annual dividends per share of 5.5 pence and share price of 108.75 pence (31 March 2017)

Net Asset Value

The Company's unaudited NAV per share as at 31 March 2017 was 109.67 pence. As at 31 March 2017, the Company owned investment properties with a fair value of GBP184.74 million and had cash and cash equivalent balances of approximately GBP11.97 million.

The unaudited NAV of the Company at 31 March 2017 was GBP141.22 million, or 109.67 pence per share, an increase of 1.26% on the Company's NAV as at 31 December 2016:

 
                                Pence   GBP million 
                            Per Share 
------------------------  -----------  ------------ 
 NAV at 31 December 
  2016                         108.31        139.46 
------------------------  -----------  ------------ 
 Valuation increase 
  in property portfolio          1.20          1.56 
------------------------  -----------  ------------ 
 Capital expenditure 
  in the period                (0.01)        (0.02) 
------------------------  -----------  ------------ 
 Income earned 
  for the period                 2.34          3.01 
------------------------  -----------  ------------ 
 Expenses for 
  the period                   (0.80)        (1.02) 
------------------------  -----------  ------------ 
 Dividends paid 
  in the period                (1.37)        (1.77) 
------------------------  -----------  ------------ 
 NAV at 31 March 
  2017                         109.67        141.22 
------------------------  -----------  ------------ 
 

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 31 March 2017 and income for the quarter, but does not include a provision for any accrued dividend.

Successful asset management

During the period, the Investment Manager exchanged contracts to let an office suite at Phoenix, Reading to Handd Business Solutions Limited ('Handd'). Handd has agreed to lease 4,333sq. ft. on a 10-year lease with a five-year option to break. The rent is GBP30.50 per sq. ft. per annum which enhances the rental tone of the building. Only 5,900 sq. ft. remains available to let.

At Abbey Retail Park in Daventry, contracts have been exchanged to let 17,610 sq. ft. to B&M Retail Limited. The retailer has agreed to sign a 10-year lease at a rent of GBP14 per sq. ft. per annum. The lease will be on full repairing and insuring (FRI) terms.

The letting secures another high profile tenant for the property and will result in the retail park element being fully let and, in the process, improve overall footfall. This was a particularly complex transaction to execute requiring the negotiation of two lease surrenders, a relocation of one tenant via a new letting and a reconfiguration of space to give the contiguous units required by B&M.

The Reading and Daventry lettings enhance the income stream of the Company and reduce the EPRA void rate from 3.9% to 1.5%.

The Investment Manager continues to work on a number of other asset management initiatives which we believe will improve the portfolio's income stream and capital value.

Outlook

The property market is in an interesting phase of the cycle, with overseas investors the most active buyers. The flight to quality remains, with properties let to good covenants, on long leases, with index-linked rent reviews achieving prices higher than pre-referendum. There is also a weight of money from private equity looking for opportunities with high post-leverage returns.

The UK institutions are not especially active but relatively low levels of property on the market are ensuring prices are holding up reasonably well for most other asset types. However, we are increasingly seeing more opportunities where assets with value-add initiatives can be acquired at attractive yields in line with our investment policy.

Income supplemented by value gains from management initiatives will be the key driver of total returns this year. Therefore identifying and executing asset management initiatives to increase capital value and enhance income will be more important than ever. As demonstrated over recent quarters, the Investment Manager has the skill set to do this and continue to build on the attractive income distribution made by the Company.

Portfolio Composition

Sector

 
 Sector              Exposure 
------------------  --------- 
 Office              57.89% 
------------------  --------- 
 Retail warehouse    36.61% 
------------------  --------- 
 Other commercial    5.50% 
------------------  --------- 
 

Geography

The portfolio is diversified across the regional markets and has no exposure to Central London assets.

 
 Sector           Exposure 
---------------  --------- 
 North East       11.97% 
---------------  --------- 
 North West       1.68% 
---------------  --------- 
 West Midlands    18.44% 
---------------  --------- 
 South West       2.58% 
---------------  --------- 
 Scotland         15.41% 
---------------  --------- 
 South East       11.64% 
---------------  --------- 
 Yorkshire        10.70% 
---------------  --------- 
 East Midlands    6.78% 
---------------  --------- 
 Wales            20.80% 
---------------  --------- 
 

Dividends

The Company paid three dividends of 0.4583 pence per share each in January, February and March 2017, in respect of the three-month period ended 28 February 2017, resulting in a cumulative dividend payment for the quarter of 1.3749 pence per share. The Board intends to continue paying monthly dividends of 0.4583 pence per share, implying an annualised dividend yield of 5.5%, calculated by reference to the Company's issue price of 100p per share as set out in its October 2014 prospectus.

The dividend remains fully covered as a result of the completion of the investment of the Company's available equity and debt, and through the implementation of asset management initiatives.

Calum Bruce, Investment Manager, commented:

"We continue to unlock value and improve income through our intensive and entrepreneurial approach to asset management. This is important in a market where market-driven yield compression is not prevalent and an active approach is needed."

Forthcoming events

The Company's interim results will be announced in May 2017. The next scheduled independent quarterly valuation of the property portfolio will be conducted by Knight Frank as at 30 June 2017 with the NAV per share at that date expected to be announced in July 2017.

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 - Canaccord Genuity, 0207 523 8000

Calum Bruce - Investment Manager, Ediston Properties Limited, 0131 225 5599

Donald Cameron - Company Secretary, R&H Fund Services Limited, 0131 550 3763

Laura Cronin - Lansons, 0207 294 3607

This information is provided by RNS

The company news service from the London Stock Exchange

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April 25, 2017 02:01 ET (06:01 GMT)