IMPT.L Regulatory News (IMPT)

30 Apr 2008 13:58

Close High Income Properties PLC30 April 2008 Close High Income Properties PLC Interim Management Statement For the Three-Month Period from 1 January 2008 to 31 March 2008 Investment Objective The investment objective is to provide shareholders with a high level of incometogether with the prospect for capital growth from investing in a diversifiedportfolio of UK light industrial and office property. Performance Summary Total Return For the 3 month period ending 31 March 2008Net Asset Value per Ordinary Share* -9.9%Net Asset Value per "D" Ordinary Share* -8.3%FTSE All-Share Index* -9.9% Capital Values - 3 months As at 31 March 2008 As at 31 December 2007 % ChangeNet Asset Value per Ordinary Share 89.01p 101.16p -12.0 Net Asset Value per "D" Ordinary Share 64.88p 72.52p -10.5FTSE All-Share Index 2,927.1 3,286.7 -10.9Ordinary Share discount to Net Asset 34.8% 27.8%Value"D" Ordinary Share discount to Net 32.2% 10.4%Asset Value Sources: Close Investments Limited, Investment Property Databank ('IPD'),Bloomberg. * - Returns are based on net dividends re-invested Dividends The twentieth interim dividend of 1.625 pence per Ordinary Share in respect ofthe period from 1 January to 31 March 2008 is payable on 30 April 2008. Theninth interim dividend of 1.25 pence per "D" Ordinary Share in respect of theperiod from 1 January 2008 to 31 March 2008 is payable on 30 April 2008. In the absence of unforeseen circumstances it is the intention of the Board tomaintain quarterly dividends at these rates giving future gross annual dividendstotalling 6.5 pence per Ordinary Share and 5.0p per "D" Ordinary Share. It isprobable that future dividends will be paid out of distributable capitalreserves rather than revenue reserves as has been the case in the past. Review for the Period The UK commercial property market experienced its most challenging period for 15years during the year as capital values fell sharply following the onset of thecredit crunch in summer 2007. According to the Investment Property Databank ("IPD") in the 12 months to March 2008 capital values were down by 15.11% andtotal returns were -10.69%. The monthly rate of capital value falls lessenedover the first quarter of 2008 as property yields rose to a level close to theirlong run average with long term gilts. However, transactions in the market haveremained subdued which reflects the contraction in the availability and theincrease in cost of debt finance, but also the concerns as to the spill overeffect on the real economy of the credit crunch on the commercial propertyoccupier market. The UK economy grew at 3% in 2007. To date in 2008, there have been warningsigns that the credit crunch has begun to impact on real economy. While thelevel of economic growth in Q4 2007 was largely unchanged from the previousthree quarters, the rate of consumer spending growth fell sharply. Morerecently, the British Retail Consortium recorded falls in High Street shoppingsales. In the residential market house prices fell during the last 6 months as,in common the commercial property market, the availability of finance decreasedwhile the cost increased. Although property has now become more fairly priced and may benefit from thecuts in interest rates, market sentiment remains cautious and risk-averse. Thereare downside risks if the credit crunch is prolonged or intensifies or ifeconomic growth slows markedly to affect the hitherto relatively resilientoccupational market. Over the quarter ending 31 March 2008, the value of both the Company's Ordinaryand "D" Ordinary Share property portfolios fell by an average of 5%. As eachportfolio is geared it has a magnified effect on the net asset value.Consequently the net asset value per Ordinary Share reduced from 101.16p to89.01p over the quarter. The net asset value per "D" Ordinary Share reducedfrom 72.52p to 64.88p. During the quarter the Company successfully completed on the sale of itsproperties at Chapel Road, Worthing and Fretherne Road, Welwyn Garden City. TheOrdinary Share portfolio also sold a unit within the Chiltern Industrial Estate,Chiltern. Proceeds from these sales were used to partly reduce the company'soutstanding debt as well as for general working capital purposes. The Company will continue to make selective disposals over the remainder of theyear. Top Ten Holdings Sector Percentage of PortfolioStephenson Court, Bedford Office 4.1%Webb Ellis Industrial Park, Rugby Industrial/Office 3.9%Ikon Trading Estate, Hartlebury Industrial 3.6%Farthing Road Industrial Estate, Ipswich Industrial 3.0%Groundwell Farm Industrial Estate, Swindon Industrial 2.8%Preston Technology Centre, Preston Industrial/Office 2.5%Appleton Court, Wakefield Office 2.5%Stadium Industrial Park, Luton Industrial 2.3%Minerva Business Park, Peterborough Office 2.3%Bellway Industrial Estate, Newcastle upon Tyne Industrial 2.2% Total 29.2% Geographical Analysis Ordinary Share Portfolio "D" Ordinary Share Portfolio Percentage of Portfolio Percentage of Portfolio 31/03/2008 31/12/2007 31/03/2008 31/12/2007LocationMidlands 27 26 38 38Yorkshire and Humberside 10 10 13 13East of England 18 18 22 22South East 10 12South West 14 14North East 9 9North West 11 10 27 27Wales 1 1 Total 100 100 100 100 Sector Analysis Ordinary Share Portfolio "D" Ordinary Share Portfolio Percentage of Portfolio Percentage of Portfolio 31/03/2008 31/12/2007 31/03/2008 31/12/2007SectorIndustrial 69 67Offices 18 18 100 100Mixed 12 12Other 1 3 Total 100 100 100 100 The Board is not aware of any significant events or transactions which haveoccurred between 31 March 2008 and the date of publication of this statementwhich would have a material impact on the financial position of the Company. Quarterly and Key Information Further information regarding the Company, including performance since launchand the most recent annual and interim reports, can be found atwww.closeinvestments.com For further information please contact: Peter RoscrowClose InvestmentsTel: 020 7426 4000 This information is provided by RNS The company news service from the London Stock Exchange