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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| F&c Commercial Property Trust Limited | LSE:FCPT | London | Ordinary Share | GG00B4ZPCJ00 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 121.20 | 121.40 | 121.60 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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To: Company Announcements
Date: 16 April 2020
Company: BMO Commercial Property Trust Limited
LEI: 213800A2B1H4ULF3K397
Subject: Trading update
Background
The COVID-19 pandemic is having a dramatic effect on all of us. The purpose of
this update is to explain how BMO Commercial Property Trust Limited ("the
Group") is being affected and the actions that are being taken to respond. Our
priorities at this challenging time are the wellbeing of everyone working at
the Investment Manager and involved with the Group, our ability to provide
support to our tenants where it is most needed and preserving the financial
strength of the Group for shareholders.
Operations
As we continue to monitor ongoing developments regarding the outbreak of
COVID-19, both the Board and the Manager are taking every precaution to
safeguard the health and wellbeing of staff, occupiers and stakeholders. The
Manager has robust business continuity plans to ensure it can maintain
operations in these challenging times. Although a work from home policy has
been introduced across all geographies the asset and property managers are in
regular contact with tenants, providing support where felt necessary. They are
also ensuring that essential services are maintained across the portfolio.
The Manager will provide assistance regarding concessions or the future phasing
of rent where appropriate. They are also focused on reducing operational costs
and service charges where they can. Our hope is that our support, in addition
to that already announced by the Government, will help place our tenants in a
position to resume normal operations as swiftly as possible when conditions
allow.
Net Asset Value
The unaudited net asset value ('NAV') per share of the Group as at 31 March
2020 was 124.3 pence. This represents a decrease of 5.0 per cent from the
audited NAV per share as at 31 December 2019 of 130.9 pence and a NAV total
return for the quarter of -3.9 per cent.
The NAV has been calculated under International Financial Reporting Standards
('IFRS'). It is based on the external valuation of the Group's direct property
portfolio prepared by CBRE Limited. The valuation certificate includes a
'material uncertainty' clause in-line with RICS guidance.
The NAV includes all income to 31 March 2020 and is calculated after deduction
of all dividends paid prior to that date. The EPRA NAV as at 31 March 2020,
which is adjusted to remove the fair value of the interest rate swap was 124.4
pence. Further analysis of the movement in the NAV and portfolio details are
included at the end of this statement.
Share Price
The share price was 74.5 pence per share at 31 March 2020, which represented a
discount of 40.1 per cent to the NAV per share announced above. The share price
total return for the quarter was -34.6 per cent.
Developments
Construction work at Newbury Retail Park is still ongoing, in accordance with
the Government's guidelines, with the contractor having taken the decision to
continue. It is the intention to hand the unit over to Lidl by the end of April
2020.
Projects at St Christopher's Place and Solihull Retail Park have been
suspended. Currently our modelling assumes capital expenditure is pushed back
by one quarter, but this may need to be extended.
Uncommitted capital expenditure will be deferred for the time being.
Rent Collection
During March, we witnessed many restrictions being put in place which resulted
in closures for many of our retail, restaurant and leisure tenants. Although
the impact of COVID-19 will be felt everywhere, rent collection from our London
based retail and leisure properties is particularly difficult.
The Group has billed c.GBP9m of its quarter 2 rent due on 25 March and has
collected 74 per cent of this amount to date (compared to 96 per cent for the
same period last year). The total quarterly rent amounts to c.GBP16 million and a
high proportion of the balance relates to rent at St. Christopher's Place, not
scheduled to be billed until 21 April. Based on dialogue with tenants at St.
Christopher's Place we would expect the overall percentage collected across the
portfolio for quarter 2 to drop. We also suspect the quarter 3 rent collection
commencing in June will be equally challenging.
Lease activity
During the quarter, we have let the sixth floor to Mitsui Fudosan at Cassini
House, London on a new 10-year lease (break at year 5) at a rent of GBP106 per
sq. ft. This letting completes the major refurbishment project, which commenced
in early 2018 at a total cost in excess of GBP9 million, and which has resulted
in significant valuation uplifts. Cassini House is a prime freehold office
building of exceptional quality in a core St. James' location with an
attractive lease profile.
Cash and Borrowings
The Group has approximately GBP20 million of available cash and an undrawn
revolving credit facility of GBP50 million. The Group's long-term debt with L&G
and loan facility with Barclays do not need to be refinanced until December
2024 and June 2021 respectively. As at 31 March 2020, the Group's loan to value
('LTV') was 22.6 per cent.
The Group continues to comfortably meet its covenants on the GBP260 million
long-term loan with L&G at the current time.
There is also significant headroom on the loan to value covenant of the GBP50
million loan facility with Barclays, which relates to the St Christopher's
Place assets. Although the Group is not currently in breach, the interest cover
test is expected to become more challenging. This particular covenant test has
been discussed with Barclays, who are sympathetic given current events, and
they have confirmed that they are prepared to support the business through this
uncertain period.
Dividend
On 4 March 2020, the Company announced its monthly dividend payment of 0.5
pence per ordinary share in respect of the financial year ended 31 December
2019 which was paid to shareholders on 31 March 2020.
Notwithstanding the Group's strong balance sheet and its high quality and
diversified portfolio, in view of the current uncertainty the impact that
COVID-19 will have on future rental receipts, particularly in relation to the
Group's retail and leisure tenants, the Board considers it prudent to
temporarily suspend its future monthly dividend payments in order to strengthen
cash reserves and protect the long-term value of the Group. The Board currently
intends to re-introduce distributions when conditions improve and believe that
the portfolio is well positioned to begin its recovery once the temporary
restrictions surrounding COVID-19 are lifted.
It is the intention of the Board to provide further Group updates as the
situation evolves.
Analysis of Movement in NAV
The following table provides an analysis of the movement in the unaudited NAV
per share for the period from 31 December 2019 to 31 March 2020 (including the
effect of gearing):
% of
Pence per opening NAV
GBPm share per share
NAV as at 31 December 2019 1,046.7 130.9
Unrealised decrease in valuation of property (51.0) (6.4) (4.9)
portfolio *
Movement in fair value of interest rate swap (0.2) 0.0 0.0
Other net revenue 10.1 1.3 1.0
Dividends paid (12.0) (1.5) (1.1)
NAV as at 31 March 2020 993.6 124.3 (5.0)
* The ungeared decrease in the valuation of the property portfolio over the
quarter to 31 March 2020 was 3.8%, after allowing for capital expenditure.
Portfolio Analysis - Sector Breakdown
Portfolio % of portfolio % like for like
Value as at capital value
GBPm 31 March 2020 shift (excl
transactions)
Offices 541.0 41.8 -1.4
West End 208.8 16.1 0.4
South East 86.8 6.7 -3.5
South West 32.5 2.5 -2.7
Rest of UK 192.6 14.9 -2.4
City 20.3 1.6 -1.7
Retail 273.4 21.1 -6.5
West End 207.2 16.0 -7.3
South East 35.0 2.7 -8.6
Rest of UK 31.2 2.4 -0.7
Industrial 227.1 17.5 -4.0
South East 28.6 2.2 -5.2
Rest of UK 198.5 15.3 -3.8
Retail Warehouse 125.1 9.7 -6.7
Alternatives 128.3 9.9 -1.7
Total Property 1,294.9 100.0 -3.8
Portfolio
Portfolio Analysis - Geographic Breakdown
Market % of portfolio
Value as at
GBPm 31 March 2020
West End 475.9 36.8
South East 277.2 21.4
Scotland 169.6 13.1
North West 153.9 11.9
Midlands 139.4 10.7
South West 32.5 2.5
Eastern 26.1 2.0
Rest of London 20.3 1.6
Total Property Portfolio 1,294.9 100.0
Top Ten Investments
Sector
Properties valued in excess of GBP250 million
London W1, St Christopher's Place Estate * Mixed
Properties valued between GBP100 million and GBP150 million
London SW1, Cassini House, St James's Street Office
Properties valued between GBP50 million and GBP70 million
Newbury, Newbury Retail Park Retail Warehouse
London SW19, Wimbledon Broadway** Mixed
Properties valued between GBP40 million and GBP50 million
Solihull, Sears Retail Park Retail Warehouse
Crawley, Leonardo House, Manor Royal Office
Winchester, Burma Road Alternative
Manchester, 82 King St Office
Properties valued between GBP30 million and GBP40 million
Aberdeen, Unit 2 Prime Four Business Park, Kingswells Office
Aberdeen, Unit 1 Prime Four Business Park, Kingswells Office
*Mixed use property of retail, office, food/beverage and residential space.
**Mixed use property of retail, food/beverage and leisure space.
Summary Balance Sheet
GBPm Pence per % of Net
share Assets
Property Portfolio 1,294.9 162.0 130.3
Adjustment for lease incentives (22.8) (2.8) (2.3)
Fair Value of Property Portfolio 1,272.1 159.2 128.0
Trade and other receivables 32.2 4.0 3.2
Cash and cash equivalents 20.2 2.5 2.0
Current Liabilities (19.9) (2.5) (2.0)
Total Assets (less current liabilities) 1,304.6 163.2 131.2
Non-Current liabilities (2.1) (0.3) (0.2)
Interest rate swap (0.4) 0.0 0.0
Interest-bearing loans (308.5) (38.6) (31.0)
Net Assets at 31 March 2020 993.6 124.3 100.0
The next quarterly valuation of the property portfolio will be conducted by
CBRE Limited during June 2020 and it is expected that the unaudited NAV per
share as at 30 June 2020 will be announced in July 2020.
Important information
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:
Richard Kirby
BMO REP Asset Management plc
Tel: 0207 499 2244
Graeme Caton
Winterflood Securities Limited
Tel: 0203 100 0268
END
(END) Dow Jones Newswires
April 16, 2020 02:00 ET (06:00 GMT)
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