17 Dec 2013 14:40
For immediate release 17 December 2013
LXB RETAIL PROPERTIES PLC
(the "Company" or the "Group")
SHARE BUYBACK PROGRAMME
Further to the announcement on 15 October 2013 that, at the extraordinary general meeting held in Jersey on that date, a special resolution to grant the Board of Directors a further general authority to buy back up to 14.99% of its issued share capital had been duly passed (the "Shareholder Authority"), the Board today announces its intention to commence a programme (the "Buyback Programme") for the purchase of its own ordinary shares ("Shares") through its broker, Oriel Securities Limited, which will act on its discretion to purchase Shares on the Company's behalf, subject to certain pre-set parameters.
The Buyback Programme will in the first instance return a maximum aggregate amount of up to £10m to shareholders. However, as announced on 4 December 2013, the Company expects that the sale of the Sainsbury's/M&S investments at Greenwich (the "Maritime transaction") which was announced on 17 June 2013, will be unconditional by 20 December 2013, at which point the Company will receive sales proceeds of £58m. At that point, it is expected that the maximum aggregate amount to be returned to shareholders pursuant to the Buyback Programme will be increased in order to return a substantial proportion of the Maritime sales proceeds to shareholders. A further announcement in this regard will be made on completion of the Maritime transaction.
Any Share purchases will be effected in accordance with the Shareholder Authority, the AIM Rules for Companies (the "AIM Rules") and the listing rules of the Channel Islands Stock Exchange (the "CISX Rules").
The maximum price which may be paid for each Share is an amount equal to 105% of the average middle market closing price for the five business days immediately preceding the date of the purchase.
In addition, given the limited liquidity in the Shares, it is possible that, on a given day, the Company may purchase more than 50% of the average daily volume of the preceding 20 business days.
Any Shares purchased pursuant to the Buyback Programme will be cancelled and the purchase will be notified to a regulatory information service in accordance with the AIM Rules and the CISX Rules.
None of the directors intend to dispose of any of their shareholdings in the Company as part of the Buyback Programme. No member of the Investment Manager's team intends to participate in the Buyback Programme.
The directors consider that the Buyback Programme is the most cost efficient and appropriate way to return this excess cash to shareholders, particularly since the amount involved is not significant relative to the Company's market capitalisation.
The Board has reviewed the status of each of the Group's investment projects for any material developments since the summary provided to shareholders on 4 December 2013 as part of the announcement of results for the year ended 30 September 2013 and considers that it has provided a comprehensive overview of the status of its investment projects and of when shareholders may expect to see progress reflected in the net asset value per share. The only additional developments within the portfolio since 4 December 2013 are summarised below.
Banbury
The Group's March 2013 planning permission was the subject of a judicial review challenge which came before the High Court of Justice in November 2013. On 17 December 2013 Mr Justice Burnett delivered his judgement stating that all grounds of the challenge have been dismissed. This is positive news for that investment although one of the claimants requested permission to appeal, The Judge refused the application but it is not known whether the claimant will ask the Court of Appeal to grant permission to appeal.
Greenwich
On 11 December 2013 the Group completed the sale of the Wickes store which was announced in June 2013. The sale price of this investment was £6.39m although receipt of £0.34m of the proceeds is deferred pending satisfaction of certain planning and letting conditions related to the Brocklebank investment. The Group has repaid £3.05m of the borrowings from Deutsche Hypothekenbank (Actien-Gesellschaft) and cancelled part of the associated interest rate swap at a cost of £37,400. Group aggregate borrowings now stand at £4.5m.
The 4 December 2013 announcement reported the Group's expectation that planning consent for Brocklebank was anticipated in December 2013. The planning committee's consideration of the application has since been deferred until January 2014.
The conditions around the Maritime transaction are now fulfilled and the Group expects to complete the sale during December 2013 releasing £58m of ungeared cash.
Under the terms of the letting of the new Sainsbury's at Maritime, the Group committed to purchase the existing foodstore at Greenwich Peninsula following Sainsbury's relocation and on 17 June 2013 the Group announced that it had received a conditional offer to acquire its interest in the existing Sainsbury's. On 12 December 2013 the Group exchanged contracts for the sale of the freehold of both the current Sainsbury's and the adjacent former Comet store to IKEA, conditional on acquisition of a further land interest and on IKEA obtaining satisfactory planning permission for a proposed new retail development. Discussions concerning the land interest are ongoing and it is anticipated that a planning decision will be achieved by mid-2014.
Sutton
The Group's planning application for a major regeneration scheme on a six acre site on the northern fringe of Sutton town centre is to be considered by the London Borough of Sutton's planning committee on 18 December 2013. The Planning Officer's report to the planning committee has been published; it concludes with a recommendation that the planning application should be approved.
Truro
On 10 December 2013 the Group completed the acquisition of a small parcel of freehold land from the owners of Willow Green Farm (the main site over which the Group has an option) for £150,000. Under the revised planning application which was submitted in November 2013, this land forms part of the foodstore site.
Potential realisations
The Chairman's statement included in the announcement on 4 December 2013 reported that, following approaches from three major institutional investors, the Group was in advanced discussions in connection with three potential disposals which place an end value on the investments in excess of £160m. Discussions have continued and in the case of one of the investments (c£78m) the legal process is very well advanced with contracts likely to be exchanged for a conditional disposal imminently. On one of the other potential disposals (c£57m), lawyers have been instructed recently. Further announcements will be made, as appropriate, in due course.
For further information please contact:
LXB Adviser LLP Tel: 020 7432 7900Tim Walton, CEOBrendan O'Grady, FD
Buchanan Tel: 020 7466 5000
Charles Ryland/Sophie McNulty/Helen Greenwoodwww.buchanan.uk.com