|Capital - Regional, the UK focused specialist property REIT, announced a trading update for the second half of 2016, prior to its year end results announcement on 9 March 2017.|
Operating performance (wholly-owned portfolio)
- The company's schemes enjoyed a good Christmas with like-for-like footfall over the last two weeks of the year up 2.2% on the prior year. Footfall improved in the second half of 2016 and for the whole of 2016 the portfolio once again outperformed the industry benchmark, by 1.9%.
- There has been continued good momentum in leasing activity in the second half of 2016 with 34 new lettings and 15 lease renewals totalling GBP2.8 million in annual rental income, at a combined 6.1% premium to ERV. Key lettings in the period include Burger King, Footasylum and Wilko at Blackburn; Card Factory and an upsized JD Sports at Luton; The Gym at Walthamstow; Foot Locker at Wood Green; and upsized Holland - Barrett stores at both Luton and Maidstone.
- Contracted rent was GBP57.5 million as at 31 December 2016. Following the sale of The Mall, Camberley in October 2016, this represents a like-for-like increase of GBP0.3 million on 30 June 2016 or GBP0.9 million on 31 December 2015.
- Occupancy remains strong at 95.4% for the portfolio at 31 December 2016.
- The valuation of the wholly-owned portfolio at 31 December 2016 was GBP794.1 million at a net initial yield of 6.01%, an increase of GBP0.5 million on the valuation of GBP793.6 million at 30 June 2016 (adjusted for the disposal of The Mall, Camberley), which represented a net initial yield of 6.00%. The capital expenditure spent on the wholly-owned portfolio during the second half of the year was GBP7.7 million.
- As announced on 4 January 2017 the Group has completed the refinancing of the debt on its five wholly-owned Mall properties by entering into new debt facilities totalling GBP372.5 million. Interest on the three new facilities has been fixed resulting in an overall blended rate of 3.27%. The weighted average maturity is 7.8 years, rising to 8.8 years if extension options are assumed to be exercised.
|Capital - Regional announces that it has today completed the refinancing of the debt on its five wholly-owned Mall properties by entering into new debt facilities totalling GBP372.5 million, of which GBP362.5 million has been drawn. Three new facilities have been entered into as follows:|
*a GBP165 million 10 year loan with Teachers Insurance and Annuity Association of America with a one year extension option;
*a GBP107.5 million 7 year loan with Wells Fargo Bank International Unlimited Company; and
*a GBP100 million bank facility of 5 years with two one year extension options with The Royal Bank of Scotland plc. GBP90 million of this facility has been drawn down with a further GBP10 million available to fund capex.
The GBP107.5 million facility is secured on The Mall, Luton, while the other two facilities are secured on the four assets at Blackburn, Maidstone, Walthamstow and Wood Green. The weighted average maturity of the new facilities is 7.8 years, rising to 8.8 years if the extension options are assumed to be exercised. Interest on the new facilities has been fixed resulting in an overall blended rate of 3.27%. This compares to an equivalent rate of 3.52% on the previous facility prior to refinancing and following the sale of The Mall, Camberley.
The repayment of the existing GBP334.6 million debt, which was due to mature in May 2019, has triggered a redemption cost of GBP7.6 million on the fixed rate debt of GBP233.3 million. A further non-cash charge of GBP3.4 million will also be recognised from the write- off of unamortised financing costs on the existing debt. This will result in a total charge of GBP11.0 million being recognised at the 2016 year end, which is equivalent to 1.6 pence per share.
|Capital - Regional announced that it has exchanged two long term leases for its former BHS units at The Mall Blackburn and The Mall Walthamstow, bringing new occupiers Wilko and the Gym Group into the schemes and delivering significant increases in passing rent.|
At The Mall Blackburn, Wilko has signed a 10 year lease to take the entire 25,000 sq ft ground floor space that was previously occupied by BHS, representing the retailer?s first store in Blackburn and delivering a strong uplift in passing rent. This builds on recent letting momentum with Burger King, Game, Costa Coffee and Krispy Kreme, all opening in the scheme by year end. The new Wilko store is expected to open in the first half of 2017 following a refurbishment of the unit.
At The Mall Walthamstow, the Gym Group has taken a 20 year lease on the 15,000 sq ft first floor space in the former BHS unit. The opening of the new 24 hour gym, which is scheduled for mid-year 2017, forms part of the strategy to introduce a broader mix of tenants and uses at Walthamstow, where the Company is advancing plans for an 86,000 sq ft retail and leisure extension. Capital - Regional is also in advanced legals with a major food retailer to take 18,000 sq ft of the remaining 25,000 sq ft ground floor space at the unit, with strong interest from a number of occupiers for the final 7,000 sq ft. The Company expects to significantly increase the rental income from that paid by BHS through the combined lettings.
There has also been good progress at Maidstone and Redditch in negotiations with major national retailers to take single occupation of the former BHS units at each of those respective schemes.
|Further to its announcement on 31 October 2016, Capital - Regional plc, the UK focused specialist property REIT, confirms that the sale of The Mall shopping centre in Camberley to Surrey Heath Borough Council has today completed. |
|Following on from the announcement made on 10 October 2016 it is confirmed that Mark Bourgeois has stepped down as a Director of Capital - Regional plc effective from today. Mark will remain assisting the business until his employment with the Company ceases at the end of the year. |
|Capital - Regional announced the unconditional exchange of contracts for the sale of The Mall shopping centre in Camberley to Surrey Heath Borough Council for a cash consideration of GBP86.0 million, representing a net initial yield of 5.9%. Completion of the sale is expected to take place by the middle of November 2016.|
GBP45.2 million of the proceeds from the sale will be used to repay debt secured on the property as part of The Mall loan facility. The balance will be held for re-investment in the Company?s shopping centre business, including the ongoing capex programme and acquisitions. The Mall, Camberley contributed approximately GBP1.8 million to the Group?s profit for the six months ended 30 June 2016. The valuation at 30 June 2016 was GBP88.5 million, representing a net initial yield of 6.15%.
|Shareholders are advised that the 1 589 874 of new ordinary shares to be issued in relation to the Company?s scrip dividend scheme, as previously confirmed in the announcement of 17 October 2016, are due to be listed on the London Stock Exchange and Johannesburg Stock Exchange on 28 October 2016. The relevant posting of share certificates and crediting of CREST, CSDP or broker accounts will also take place on that day. Following the issue of the new shares, the total number of shares in issue and voting rights in Capital - Regional will be 702 342 500.|
|Capital - Regional announced that a total of 1 589 874 ordinary shares of 1 pence each in the Company (?scrip dividend shares?), being approximately 0.2 per cent of the current issued share capital of the Company, are to be issued pursuant to the election offered to shareholders to receive the interim dividend for the six months ended 30 June 2016 by way of the issue of new ordinary shares. The scrip dividend shares will rank pari passu in all respects with the Company?s existing issued ordinary shares.|
An application will be made for the scrip dividend shares to be admitted to the Premium Segment of the Official List of the United Kingdom Listing Authority, to trading on the London Stock Exchange?s Main Market for listed securities, and to be listed on the Johannesburg Stock Exchange (?admission?). It is expected that admission will occur on Thursday, 27 October 2016.
Following the issue of the scrip dividend shares, the total number of shares in issue and voting rights in Capital - Regional will be 702 342 500 with effect from Thursday, 27 October 2016. This may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, Capital - Regional under the UK Financial Conduct Authority's Disclosure and Transparency Rules.
Share certificates will be posted to certificated shareholders who elected to receive scrip dividend shares on Thursday, 27 October 2016. Similarly, the CREST, CSDP or broker accounts of dematerialised shareholders who elected to receive scrip dividend shares will be credited with scrip dividend shares on Thursday, 27 October 2016.
|Capital - Regional announced the following changes to its Board of Directors: |
Guillaume Poitrinal is appointed as a Non-Executive Director, with effect from 1 November 2016. Guillaume brings a wealth of highly relevant experience from a very successful career in real estate, and shopping centres in particular, most prominently at Unibail-Rodamco, one of Europe's largest commercial property companies, which he joined in 1995 and where he served as Chief Executive between 2005 and 2013.
Guillaume is the founder and Chairman of ICAMAP Investments S.ar.l ('ICAMAP'), a specialised investment fund focusing on property stocks. Guillaume Poitrinal's appointment is in a personal capacity although by virtue of his involvement with ICAMAP, which is a 7.35% shareholder in the company, he is not considered independent under the terms of the UK Corporate Governance Code.
|Shareholders are referred to Capital - Regional?s Half Year results to 30 June 2016, released on SENS on 18 August 2016, and are advised that the adjustment for revaluation of investment properties for the six months to 30 June 2016, as set out in the Headline earnings per share table in Note 7, should have been stated at GBP8.6 million, as opposed to GBP5.4 million. This results in a corrected Headline Earnings for the six months to 30 June 2016, on both a Basic and Diluted basis, of GBP11.5 million or 1.6 pence per share.|
Headline earnings per share is a measure presented for the JSE. The change has no impact on the remainder of the half year results, the contents of which remain as previously published.
|The following results are the company's maiden results. Revenue from continuing operations came in at GBP43.9 million. Gross profit was GBP27.8 million whilst profit on ordinary activities before financing of GBP18.6 million was recorded. Profit for the period was GBP7.2 million. Furthermore, headline earnings per share were GBP1.2 pence per share.|
In keeping with its policy of distributing at least 90% of Operating Profit from the company's Wholly-owned assets, the board is proposing an interim dividend of GBP1.62 pence per share, all of which will be paid as a Property Income Distribution (PID). This represents an increase of 8% from the 2015 Interim dividend. A Scrip dividend alternative may be offered.
Capital - Regional is likely to have to contend with political and economic uncertainty for some time to come. This may have implications for both investment markets, as detailed above, and its operating environment.
Encouragingly, however, as markets have stabilised in recent weeks we are seeing increased opportunities to recycle capital on terms which will enable us to crystallise attractive returns. Recycling will enable the company to take advantage of accretive investment opportunities, whilst having due regard to prudent balance sheet management.
|Following the Annual General Meeting which took place, the Company confirms that Philip Newton has stood down as a Non-Executive Director with immediate effect.|
|Capital - Regional announces that at the Annual General Meeting (?AGM?) of the Company held on 10 May 2016 all of the resolutions set out in the Company's Notice of AGM dated 12 April 2016 were duly passed on a show of hands. Proxies were received by the Company from shareholders in advance of the meeting as set out in the table below. The Company has a total of 700,752,626 ordinary shares with voting rights in issue.|
|Capital - Regional plc announces that its 2016 Annual General Meeting will be held on 10 May 2016 at 10.00 am (British Summer Time) at The Rubens at The Palace Hotel, The Van Dyke Suite, 39 Buckingham Palace Road, London, SW1W 0PS, United Kingdom. Shareholders must be registered in the Register of Members of the Company at 6.00 pm (British Summer Time) on 8 May 2016, to be entitled to attend and vote at the Annual General Meeting.|
In connection with this, the Notice of Annual General Meeting and the 2015 Annual Report and Accounts are being posted and/or made available to shareholders today. Copies of the documents will shortly be available in the Investor Info section of the Capital - Regional plc website at www.capreg.com and from the UK National Storage Mechanism at: www.hemscott.com/nsm.do.
|Capital - Regional, the UK focused specialist property REIT, announced the GBP7.8 million acquisition of Fareham House in Hemel Hempstead in an off-market transaction.|
The acquisition, which is immediately adjacent to both the Marlowes shopping centre and Edmonds Parade, which were acquired by the company in February 2016, means that Capital - Regional now has the significant opportunity of consolidating all three assets into a single, dominant town centre scheme. Altogether, the properties provide 340,000 sq ft of retail space across 87 retail units, with 1,200 car parking spaces.
The total acquisition cost of the three properties is GBP53.8 million, representing a yield of 7.0% on the retail space. The transactions have been funded using existing cash, a small draw-down on the Group?s central facility and a non-recourse loan with the Royal Bank of Scotland of GBP26.9 million. The loan runs for five years with two one year extensions available at the end of each of the first two years. The rate of interest payable on the loan following hedging is expected to be around 3.3%.
The company is also on the afternoon of Monday 21 March 2016 hosting an investor visit to The Mall, Walthamstow, comprising a presentation from senior managers followed by a tour of the centre. No new material trading or financial information will be disclosed and the presentation will be available on the company's website at www.capreg.com after 14:30 (UK time) on Monday 21 March 2016.
|Capital - Regional has released their maiden results therefore there are no comparative figures. Revenue for the year was GBP80.7 million and gross profit was recorded at GBP51.6 million. Profit for the year attributable to equity holders of the parent was GBP100 million. Furthermore, headline earnings per share were GBP3.2 pence per share.|
For 2015, the board is proposing a final dividend of 1.62p per share, taking the full year dividend to 3.12p representing an increase of 228% compared to last year.
There are good reasons to be optimistic about the prospects for Capital - Regional. Retailers trade profitably in the group's shopping centres and the investments the group is making are leading to strong interest from leisure operators and retailers wanting to come into Capital - Regional's schemes, whilst incumbents are also upsizing. Indeed, the momentum in letting activity has picked up since the beginning of 2016 despite some continuing challenges in the operating environment. Altogether, this serves to reinforce the group's belief that it can deliver the promised returns in terms of both income and capital uplift from the Capex programme.
The slowdown in transactional activity in the early part of this year means that there is currently limited guidance for the future direction of property valuations. Having said that, the group's plans will create value irrespective of market conditions.
Management's focus is not only to deliver the previously announced asset management programme, but also to look to take advantage of opportunities adjacent to Capital - Regional's existing schemes, which will enable the group to consolidate the group's market position in the towns Capital - Regional has a presence in. The group will also maintain its entrepreneurial approach to acquisitions and actively seek opportunity to recycle capital where this will crystallise attractive returns and allow a reallocation to more accretive investments. This gives the group confidence that the growth prospects for the business go well beyond delivery of the GBP65 million Capex programme.
|Following changes made to the Disclosure Rules and Transparency Rules ("DTR") as a result of the Transparency Directive Amending Directive, the Company is required to disclose its home state. Accordingly, in accordance with DTR 6.4.2, the Company announces that its home state is the United Kingdom. |
|As previously announced Philip Newton will be stepping down as a non-executive director of the company at the 2016 AGM. In advance of that the board confirm that Tony Hales has been appointed to replace Philip as Senior Independent Director and that changes have been made to the Chairmanship of its various Committees as detailed below. All of these changes are effective immediately.|
*Audit Committee - Ian Krieger has taken over from Tony Hales as Chairman.
*Remuneration Committee - Tony Hales has taken over from Philip Newton as Chairman.
*Responsible Business Committee - Laura Whyte has taken over from Philip Newton as Chairman.
In addition Ian Krieger and Laura Whyte have been appointed as members of the Nomination Committee and John Clare has stepped down as a member of the Audit and Remuneration Committees. Philip Newton will remain a member of all Committees until the 2016 AGM.
|On 14 December 2015 the Company received notification that Arctospark, an entity in which Louis Norval has a beneficial interest, has resolved to transfer or dispose of all of its 29 102 863 shares in the Company. The transactions are due to be completed by 24 December 2015 all at a price of 15.80 ZAR per share, equivalent to 68.5p per share based on an exchange rate of 23.07 ZAR to 1 GBP at 14 December 2015. The result of these transactions will be that: |
- 12 746 398 shares will be acquired by PDI Investment Holdings Ltd.;
- 8 512 948 shares will be acquired by MStead Ltd.;
- 5 830 353 shares will be transferred to De Katwijk Trust;
- 958 435 shares will be transferred to Exdiem Trust; and
- 248 260 shares will be transferred to Rameros Investments.
Louis Norval has a beneficial interest in PDI Investment Holdings Ltd. and MStead Ltd. De Katwijk Trust, Exdiem Trust and Rameros Investments are connected parties of Louis Norval although he does not have a beneficial interest in these entities. The remaining 806 469 shares held by Arctospark will be transferred to entities with no ongoing connection to Louis Norval.
On completion of these transactions PDI Investment Holdings Ltd. will have a shareholding of 60 462 806 shares representing 8.63% of the Company?s issued share capital and MStead Ltd. will have a shareholding of 67 121 055 shares representing 9.58% of the Company?s issued share capital.
The revised beneficial interest of Louis Norval will be 129 074 861 ordinary shares, representing 18.42% of the Company?s issued share capital. The total shareholding of all parties connected to Louis Norval, including those in which he has a beneficial interest and those which he does not but has a connection to, is 167 718 632 shares, representing 23.93% of the Company?s issued share capital. Wessel Hamman, a Non-Executive Director of the Company is a Non-Executive Director of Homestead Group Holdings, the parent company of MStead Ltd. and a shareholder in PDI Investment Holdings Ltd. but he has no beneficial interest in the shares held by either entity.
|In line with the announcement made on 15 October 2015, Laura Whyte?s appointment as a Non-Executive Director of Capital - Regional has taken effect from this morning.|
Laura holds 37 000 ordinary shares in the company, representing 0.005% of the company?s issued share capital.
Laura brings a wealth of experience from a long and successful career with John Lewis Partnership, where she served in two separate roles on the John Lewis Management Board for over 10 years, firstly as Registrar and latterly as HR Director. Laura is a Non-Executive Director of the Defence People and Training Board of the Ministry of Defence, the British Horseracing Authority and the British Equestrian Federation. She is also an Executive Trustee of Women in Retail.
|Capital - Regional announced the appointment of Laura Whyte as a Non-Executive Director, to take effect from 1 December 2015.|
Laura brings a wealth of experience from a long and successful career with John Lewis Partnership where she served in two separate roles on the John Lewis Management Board for over 10 years, firstly as Registrar and latterly as HR Director. Laura will join the Audit and Remuneration Committees with effect from her appointment and will take over the Chairmanship of the Responsible Business Committee from Philip Newton when he steps down from the Board at the 2016 AGM.
Laura is a Non-Executive Director of the Defence People and Training Board of the Ministry of Defence and of the British Horseracing Authority and British Equestrian Federation. She is also an Executive Trustee of Women in Retail.
|On 13 October 2015 Capital - Regional received notification that Karoo Investment Fund (?Karoo?) has made arrangements to dispose of or transfer in specie the entirety of its 70,040,911 holding of ordinary shares in the Company, held on the Company?s sub-register on the Johannesburg Stock Exchange (?JSE?), representing 9.995% of the Company?s issued share capital.|
The underlying shareholders in Karoo have been given the choice of receiving their pro-rata entitlement in shares of the Company or electing for their interest to be sold for cash. To facilitate the latter Karoo has appointed Java Capital to manage an imminent placing in the South African market. It is expected this will involve the sale of up to approximately half of Karoo?s holding with the remainder being transferred in specie to the respective underlying holders.
Louis Norval and his connected parties have interests in the underlying shareholders of Karoo that equate to approximately 40% of Karoo?s current shareholding in the Company. Wessel Hamman is also a Director of Karoo.
|Capital - Regional is a UK focused specialist property Real Estate Investment Trust (?REIT?) with a strong track record of delivering value enhancing retail and leisure asset management opportunities across a GBP1 billion portfolio of in-town dominant community shopping centres.|