Sutton Harbour Holdings Regulatory News (SUH)

13 September 2023

Sutton Harbour Group plc (the "Company")

Annual General Meeting Statement

The Chairman of Sutton Harbour Group plc issued the following update to shareholders attending today's AGM.

Since my last update in the Annual Report published in July 2023, I am pleased to report that Summer trading has been successful, with particularly strong performance recorded by the car parks. Both marinas are currently trading at close to capacity each with 96% occupancy. Increasing visitor revenues have taken the overall equivalent occupancy rate of the marinas to 99% in the five-month period to the end of August 2023. Fisheries trading is slightly improved in the trading year to date compared with the prior period, buoyed particularly by fuel sales by volume up 29%. In April 2022, the Company took the decision to reduce the margin charged on fuel sold to support the fishing industry and to attract more vessels. The increased sales volume is assisting to restore and grow profit on fuel sold.

The construction of the Harbour Arch Quay building at Sutton Harbour is now nearing completion. Of the total 14 apartments, 12 have exchanged and 2 are pending exchange. Fit out of the ground floor will follow to allow occupation by the Company by the end of 2023. Development finance is expected to be fully repaid by mid October 2023.

The first of two work phases being undertaken and financed by the Environment Agency to replace the lock cills in Sutton Harbour has just started and is scheduled to run for the next 10 weeks. The Company has put in place various backup facilities to support fishers during periods when Sutton Harbour cannot be accessed. A second phase of works for a further 10 weeks will take place starting March 2024. The lock is a fundamental flood defence for the Barbican area of Plymouth which was installed in 1992 and is maintained by the Environment Agency.

Interest rates have continued to rise, and the cost of servicing debt has become an increasing burden upon the Company. The Company is addressing these challenges and whilst the Company does not anticipate rates to continue to increase as they have done over the past 20 months, strategic planning is taking into account that rates could remain at, or around, their current levels. The Company continues to consider instruments to fix rates on all/part of the debt, subject to securing acceptable terms.

The Company has taken the following actions to reduce debt and consequent interest charges:

· Raised £2.9m new equity capital in May 2023; and

· Repaid £1.6m bank loan with a further £1.6m loan repayment expected by 29 September 2023, with the Company's bank having agreed to extend the repayment date from 31 August 2023.

The Company's stated strategy is realising value and reducing debt from the following programme:

· Material upgrade of existing assets to improve rental returns, as demonstrated with the redevelopment of the Old Barbican Market, completed in early 2023, with three new tenants yielding 50% more than the previous tenant.

· Realisation of long-term leases with secure covenant and/or public sector tenants.

· Development of existing land and property holdings for sale / leasing. Current and upcoming projects are Harbour Arch Quay, North Quay House, Sugar Quay and Sutton Road.

· Disposal of selected assets where the value is mature, but balanced against the reduction of income generating potential of such assets.

· As debt reduces, the Company intends to retain more future developments for rental purposes, to provide growth in annual revenues.

The next upcoming project is planned to be the redevelopment of North Quay House, an office building which is now largely vacant, scheduled to start in 2024. The Company is currently considering the best value uses for this site, in the context of the current economy and property use demand, before submitting a planning application in the near future. The consented Sugar Quay plan is currently being adapted to reflect the expected sales absorption rate and financiers' criteria and this work will lead a planning re-submission in 2024 and construction to start in 2025.

This strategy will allow the Company to progressively reduce debt over the medium term.

The Interim Results for the 6-month period to 30 September 2023 are due to be published in December 2023.

Enquiries:

Notes to Editors

Sutton Harbour Group plc (AIM: SUH) is an AIM quoted company specialising in marine operations, waterfront regeneration and destination creation in Plymouth and South West England.

The Company operates Sutton Harbour Marina, King Point Marina and Plymouth Fisheries. Operational activities include mixed-use lettings, car parking and support services to harbour users, property management and regeneration and asset enhancement.

Sutton Harbour is committed to being the leading marine and waterfront regeneration specialist in Southern England, and to positioning Sutton Harbour in Plymouth as a destination of national interest.