Last checked at 13 Nov 2015 07:00
13 November 2015
Alpha Pyrenees Trust Limited (the "Trust" or the "Company")
Trading Update
Alpha Pyrenees Trust Limited today publishes its trading update statement for the quarter ending 30 September 2015 and the period up until the date of this announcement. The information contained herein has not been audited.
KEY POINTS
· MATURITY OF BORROWINGS EXTENDED TO 15 APRIL 2016
· TRUST HAS THE SUPPORT OF ITS LENDER FOR AN ORDERLY REALISATION OF ITS INVESTMENT PROPERTY
· SALES PROCESS IS UNLIKELY TO RESULT IN ANY RETURN TO ORDINARY SHAREHOLDERS
· ADJUSTED NAV* 0.0 PENCE PER SHARE AS AT 30 SEPTEMBER 2015 (30 JUNE 2015: 2.4 PENCE PER SHARE)
VALUATION AND NET ASSET VALUE ("NAV")
The Trust's current investment portfolio, excluding the Cordoba property which was sold in July, was last valued on 30 June 2015 at €254.1m (£188.4m at 30 September 2015 exchange rate) giving an average valuation yield across the portfolio of 8.3% (French portfolio 8.2% and Spanish portfolio 9.0% respectively).The next independent revaluation will take place as at 31 December 2015.
As at 30 September 2015 the adjusted NAV* is 0.0 pence per share. The decrease in adjusted NAV from 31 December 2014 (6.0 pence per share) is due to the combined effect of the loss incurred in the period, property revaluation, adverse foreign exchange effects and the contingent liability for deferred arrangement fees, described below.
*Adjusted NAV - unaudited, after adjustments for the interest rate swap derivatives (only relevant for the 31 December 2014 comparative), 50% of the deferred tax provisions and part of the contingent liability for deferred arrangement fees.
FINANCING
It was announced on 15 October 2015 that the Trust's loan facilities with Barclays Bank PLC ("Barclays") have been extended and the maturity date of all its borrowings (€257.3m) has been extended to 15 April 2016.
The current interest rates will continue to apply to the facilities during the extension period. Arrangement fees (charged at 2% per annum pro-rated) on the initial and new extensions will all be deferred to the new maturity date and will be payable to the extent that the Trust has sufficient cash funds at that time. The Trust is currently compliant with its borrowing covenants.
SALES PROCESS
As reported in the half year report, in July the Trust sold the Connecta retail park at Cordoba for €15.3m which represented its valuation as at 30 June 2015 and the sales proceeds were used to reduce the Trust's bank borrowings.
The Trust has the support of its lender for an orderly realisation of its investment property. The Investment Manager is focussed on this process and formal marketing of the majority of the Trust's properties is progressing with the aim of realising sales proceeds to support the settlement of the bank borrowings as they mature. The results of the marketing process to date indicate that although there is no certainty that any transactions will take place, if they do, the Board does not expect that there will be any value to return to ordinary shareholders after repayment of its bank borrowings has taken place.
The Trust will provide further updates in due course.
DIVIDEND
The Trust does not propose to pay dividends.
PROPERTY UPDATE
The Trust's Investment Manager has continued to concentrate on active asset management and property management initiatives. Since 30 June 2015, new leases and lease extensions covering approximately 1,685 square metres (0.7% of the Trust's current portfolio by area) have been achieved as detailed below.
FRANCE
· Goussainville - A new 6/9/12 year lease from November 2015 was signed with Leonor Greyl, a hair care products and treatments company, on 1,280 square metres of warehouse space.
· Mulhouse - A new 6/9/12 year lease from January 2016 was signed with Allen System Group, a computer software company, on 190 square metres of office space
SPAIN
· Alcala - A new 5/8/12 year lease was signed from October 2015 with restaurant operator, Pomodoro, on a 215 square metre retail unit.
GENERAL
The Investment Manager remains focussed on ensuring service charges are controlled; the annual level of property costs is closely monitored and additional sources of income are identified.
The Trust's portfolio has an overall level of average occupancy of 79% (80% at 30 June 2015), measured by rental income as a percentage of potential total income. The weighted average lease length as at 30 June 2015 was 9.1 years to expiry and 6.4 years to next break with 90% of the current portfolio income coming from Grade A tenants. By value, 98% of the Trust's portfolio is in France and 89% is in the Paris region.
RENTAL INDEXATION
The INSEE Construction Cost Index ("ICC"), applicable to the Trust's leases in France, showed an annualised decrease of 0.4% for the latest published quarter, Q2 2015, following an annualised decrease of 1.0% for Q1 2015.
The Spanish Consumer Price Index, applicable to the Trust's leases in Spain, was running at an annualised rate of decrease of 0.7% as at the end of October 2015.
For further information:
Dick Kingston, Chairman, Alpha Pyrenees Trust Limited 01481 231100
Paul Cable, Fund Manager, Alpha Real Capital LLP 020 7391 4700
For more information on the Company, please visit www.alphapyreneestrust.com.
FORWARD-LOOKING STATEMENTS
This interim management statement contains forward-looking statements which are inherently subject
to risks and uncertainties because they relate to events and depend upon circumstances that will
occur in the future. There are a number of factors that could cause actual results to differ materially
from those expressed or implied by such forward-looking statements. Forward-looking statements are
based on the Board's current view and information known to them at the date of this statement. The
Board does not make any undertaking to update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise. Nothing in this interim management statement
should be construed as a profit forecast.