Last checked at 19 Nov 2009 11:36
19 November 2009
TOWN CENTRE SECURITIES PLC
("TCS" or "The Company")
Interim Management Statement
Town Centre Securities PLC, the Leeds based property investment and development company, announces its Interim Management Statement covering the period from 1 July to 18 November 2009 ("the period").
Overview
The period has seen property valuations stabilise. It is too early to predict prolonged recovery but the worst is behind us and we believe there may be modest increases in our half year valuation as at 31 December 2009.
The tenant environment remains difficult and will remain so for the foreseeable future with further business failures and pressure on rents a constant challenge. We continue to believe that our investment portfolio, and in particular our exposure to value for money retailing, puts TCS in a good position. Despite our caution, we are seeing signs of improved tenant demand for retail and office space.
Our focus remains on protection of existing resources and preservation of capital. However, TCS is securely financed and as a result, well positioned to react to opportunities as they emerge.
Highlights of our activity in the period include:
Financing
At 18 November 2009, the Company had net debt of £149.7m (30 June 2009: £166.5m) comprising £106.2m of 5.375% debenture stock repayable in 2031, and £43.5m of bank loans at floating interest rates.
TCS has two term loan facilities, together £85m, with maturity dates from 2012 to 2014, and £15m of overdraft and money market facility.
As reported in August 2009, we completed the buy back and cancellation of £43.8m of debenture stock, realising a profit of £9.0m and on a pro forma basis adding 17p to the net asset value per share of 202p at 30 June 2009. One of the benefits has been to extend significantly the headroom in our facilities (TCS now operates comfortably within its loan to value and interest cover covenants) without recourse to dilutive equity funding.
Acquisitions and Disposals
The sale of an office building at Piccadilly Basin in Manchester for a total of £7.0m at an overall initial yield of 8.8 %, in July 2009.
The sale of all nine of the town houses and apartments completed as part of the development at West Park, Harrogate for a total of £2.9m.
The sale of the upper floors at Deansgate, Manchester for £1.75m in July 2009 at an initial yield of 7%.
The acquisition of two retail stores in Wood Green and Holloway Road, London for a total of £1.75m at an initial yield of 8% in August 2009
Asset Management
Occupancy levels have improved significantly in the period from 91.6% at 30 June 2009 to 93.0% at 9 November 2009.
Re-letting the 120,000 sq ft retail store at Piccadilly Basin and the refurbished 40,000 sq ft Town Centre House remain our top priorities and there has been encouraging progress with both. Aldi will be opening its planned 16,000 sq ft food store at Piccadilly Basin later this month and there has been a notable increase in enquiries for the rest of the available space.
Similarly, at Town Centre House, two new lettings have been secured and there is a strong level of enquiry for the now remaining 14,000 sq ft. Other new lettings at The Merrion Centre include a retail unit to Brighthouse, the UK's leading rent-to-own retailer with 180 outlets, and the vacant office space in Wade House to the Consumer Credit Council.
We have also secured Jacobs, the independent photographic retailer, as a new tenant at Shandwick Place, Edinburgh which becomes their 18th store across the UK. In Glasgow, Waitrose have recently opened their third Scottish store at our valuable 32,000 sq ft Byers Road site in the West End.
Rent collection has continued to be satisfactory. At the September 2009 quarter days over 97% of the rent due was collected within seven days and our bad debt experience remains comfortably within our expectations. The broad spread of our tenants (TCS has no tenants with more than three premises), and our focus on the value for money retail sector, has continued to insulate us from the worst of the operational problems that have faced the retail property sector.
Developments
It is now over two years since we commenced any development activity. Nevertheless we continue to be optimistic about the long term potential of the development sites in our portfolio.
Car Parking
Demand for car parking at our sites in Leeds and Manchester continues to be strong. We are actively seeking new car parks, both to own and manage, with a view to building a meaningful business within TCS.
Edward Ziff, Chairman, commenting, said:
"We are encouraged by signs of improvement in the occupational market and pleased to see indications of stability in property values. TCS is able to look to the future with a sound financial base and a robust and resilient investment portfolio."
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For further information, please contact:
Town Centre Securities PLC www.tcs-plc.com
Edward Ziff, Chairman and Chief Executive 0113 222 1234
Smithfield
Reg Hoare / Rebecca Whitehead 0207 360 4900