Last checked at 6 Feb 2023 08:00
6th February 2023
BRUNTWOOD GROUP LIMITED
BRUNTWOOD INVESTMENTS PLC
BRUNTWOOD BOND 2 PLC
UPDATE STATEMENT ON 2022 ANNUAL RESULTS
Bruntwood Group Limited ("Bruntwood") today updates the market on the recent publication of the 2022 financial statements and a summary of the latest rent collection position.
Across the group, net asset value rose by more than 10% to £671.5m (2021: £606.5m) and the value of its combined portfolio, including Bruntwood SciTech assets and other joint ventures reached £2.0bn (2021: £1.8bn).
Chris Oglesby, CEO of Bruntwood, said
"We have aligned our products and proposition with the businesses and organisations driving the future of the UK economy in innovation-linked sectors like tech and digital, life sciences and their supporting ecosystems, all of which continue to show huge potential in many of our regional cities.
"As we now lean into the challenges presented by the end of another economic cycle, this will remain our focus. We will continue to focus our energies on investing in assets, whether that's for Bruntwood SciTech or Works, in such a way that meets the needs of modern business and industry, targeting growth into new and existing cities around the UK."
Bruntwood made a number of significant investments and acquisitions that contributed to this growth, while market sentiment towards science and technology real estate assets strengthened.
Within the Bruntwood SciTech portfolio, it unveiled a £76.2m investment into the purchase and regeneration of Glasgow's famous Met Tower, to create a new tech and digital campus and marking Bruntwood and Bruntwood SciTech's first development in Scotland.
Within the Bruntwood Works portfolio, it completed the £3m refurbishment of Liverpool's The Plaza, gained approval for the net zero redevelopment of Manchester's Grade II listed Pall Mall and work started on the 90,000 sq ft Castle House in Leeds as part of the wider West Village regeneration project.
Financial Position
The Group filed its annual accounts for the year ending September 30th 2022. Key highlights include:
· Reported pre-tax profit of £75.2m (2021: £44.9m) - the second-best results in the group's 46-years of trading
· Net asset value increases of 10.7% (£671.5m) and total assets under management hits £2.0bn (2021: £1.8bn)
· Further investment of £147m of capital, realised revaluation gains of £153m and non-core disposals of £72m.
The full financial statements can be found at:
https://bruntwood.co.uk/our-performance/disclaimer/retail-bond-2025/
The Group's liquidity position has also improved. As of 31st January 2023, the Group has £16m of cash reserves (10 January 2022: £9.2m), £40m of undrawn committed available facilities (10 January 2022: £28m) and £70m (10 January 2022: £71m) of unencumbered assets upon which further finance could be secured.
The 2025 bond covenants have been tested as at September 2022 and are met with significant headroom. The covenant testing and compliance certificate can be found on the Bruntwood website (link as above).
At the same time, given the challenging economic outlook, the Board has increased its stress testing and the consideration of various scenarios including reviewing estimated customer default rates, lower retention rates, higher concessions and valuation yield movement. Based on the output of these models, the Board considers there to be sufficient income and valuation headroom across Bruntwood's debt facilities and does not expect Bruntwood to breach any terms relating to them. We have modelled the forecast covenant performance on each loan facility. Valuation covenant headroom is in excess of 30% on all of our facilities.
Nevertheless, due to the rise in interest rates, the Group has negotiated less onerous Interest Cover (ICR) covenants on its main debt facility to help support the business for the future.
Impact on Operations
As of 27th January 2022, 93% of December quarter rents had been collected. This is comparable to the September / June quarters at the same point and ahead of the prior year comparative.
ENDS
For further information, please see Bruntwood's website at https://bruntwood.co.uk/or contact:
Kevin Crotty (Chief Financial Officer) | +44 (0) 161 212 2222 |
Sean Davies (Director of Financing & Investment) Patrick King, Mark Truman (WH Ireland Capital Markets) Mark Glowrey (Allia C&C)
| +44 (0) 161 212 2222 +44 (0) 207 220 1666
+44 (0) 203 039 3465 |
Forward-Looking Statements: This announcement contains certain forward-looking statements with respect to Bruntwood's expectations and plans, strategy, management objectives, future developments and performances, costs, revenues and other trend information. These statements are subject to assumptions, risk and uncertainty. Many of these assumptions, risks and uncertainties relate to factors that are beyond Bruntwood's ability to control or estimate precisely and which could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. Certain statements have been made with reference to forecast process changes, economic conditions and the current regulatory environment. Any forward-looking statements made by or on behalf of Bruntwood are based upon the knowledge and information available to Directors on the date of this announcement. Accordingly, no assurance can be given that any particular expectation will be met and Bruntwood's bondholders are cautioned not to place undue reliance on the forward-looking statements. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority), Bruntwood does not undertake to update forward-looking statements to reflect any changes in events, conditions or circumstances on which any such statement is based. Past bond performance cannot be relied on as a guide to future performance. Nothing in this announcement should be construed as a profit forecast. The information in this announcement does not constitute an offer to sell or an invitation to buy securities in Bruntwood or an invitation or inducement to engage in any other investment activities.