Town Centre Regulatory News (TOWN)

18 November 2011

TOWN CENTRE SECURITIES PLC("TCS" or "the Company")Interim Management Statement

Town Centre Securities PLC, the Leeds based property investment and development company, presents its Interim Management Statement covering the period from 1 July 2011 to 17 November 2011 ("the period").

Overview

The Company has continued to focus on the management of its existing portfolio of investment properties and car parks. Performance overall has been consistent with the same period last year and is in line with our expectations.

Asset Management

We have been working with our tenants at Urban Exchange in Manchester to develop a successful brand for this outlet centre as we believe there is an opportunity to market the centre to the benefit of landlord and tenants. Only one unit, 7,000 sq ft, out of 140,000 sq ft, remains unoccupied.

Following the refurbishment of the Merrion Street retail units at our Merrion Centre in Leeds we handed new shop units over to KFC and Coral for their fit out. Responding to the commencement in February 2011 of the construction of the Leeds Arena, a 13,500 capacity concert and events venue located immediately adjacent to the Merrion Centre, we continue to advance our plans for the refurbishment of the multi-storey car park and creation of additional retail/leisure units at ground floor level. We expect to receive planning and hope to be on site in the early part of 2012.

Our void level has been maintained at around 3%, following the considerable reduction in voids achieved through letting the vacant space at Urban Exchange and other asset management over the last year.

Rent collection continues to be very strong with 99% of our September quarter day rents collected within five days of the due date. The broad spread of our tenants and our focus on the value for money retail sector stand us in good stead. However, we remain wary about rent collection, lease renewals and unforeseen voids due to the risk of tenant failures and administrations. The tenant market is challenging and we closely monitor tenant performance.

Financial performance

As at 17 November 2011, the Company had net debt of £142.8m, (30 June 2011; £140.1m) comprising £106.0m of 5.375% debenture stock repayable in 2031, and £36.8m of bank loans. This is consistent with our expectations.

There is significant headroom in our facilities and we continue to operate comfortably within our loan to value and interest cover covenants. Discussions are at an advanced stage to complete the refinancing of our bank facilities. As previously indicated, inevitably we will incur higher borrowing costs compared to the more favourable margins in our existing facilities.

Acquisitions and Disposals

No acquisitions or disposals were completed in the period. We are continuing to look for opportunities to grow our property portfolio and car parking business. So far, available opportunities have not met our criteria for property acquisitions where we can create value. This relies on identifying properly priced opportunities with value now rather than the promise of value in the future. 

 Developments

As announced in September, we are progressing our joint venture arrangement with Metric Property Investments plc at Rochdale. Work continues on identifying suitable tenants with a view to being on site in the latter half of 2012.

Car Parking

Year on year, car parking revenues are in line with our expectations given increasing competition and market conditions. Parking volumes at the Merrion Centre Multi-Storey Car Park have continued to grow as a result of our active asset management and this is helping to drive footfall in the Merrion Centre.

Edward Ziff, Chairman, commenting, said:

"We continue to maintain a very strong focus on managing our assets effectively and this is reflected in our void rate remaining close to 3%. We are pleased with progress so far at Urban Exchange where our tenants are trading satisfactorily. There is, however, uncertainty for the retail sector at present and we remain cautious about the future as a result."

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