Town Centre Regulatory News (TOWN)

14 May 2008 07:00



TOWN CENTRE SECURITIES PLC

("TCS" or "The Company")

Interim Management Statement 

Town Centre Securities, the Leeds based property investment and development company announces its Interim Management Statement covering its third quarter, ended 31st March 2008.

Overview

The Company has continued to make progress and performance remains in line with the Board's expectations in spite of very challenging times for the property sector. The impact of the problems in the banking and financial system on direct property investment has been significant and we do not believe that it has fully worked through the system. In spite of that we continue to look for investment and development properties and believe that attractive opportunities will emerge, but we remain very cautious about the short-term outlook.

Our continued focus has been on protecting our existing resources and on improving future yields in our portfolio through refurbishments and in maintaining the momentum on our development portfolio. New signed lettings on redevelopments will generate future increases in rental income but have created short-term voids and reductions in rental income with associated irrecoverable costs. Excluding such situations our void levels remain low and there has been no significant adverse change in bad debt and default experience, although we are monitoring these closely. 

We have recently agreed renewals of over £100m of our bank facilities for five years, with the majority of our borrowing being at fixed rates. This will largely insulate the Company from the current difficulties in the financial system for that period of time.

Progress in our car park business continues and we are optimistic it will continue to show growth. Although we have only been trading for a few months, early indications for our serviced apartments venture at Bath Street, Glasgow, continue to be encouraging.

Highlights of our activity during the period include:

Acquisitions and disposals

£3.05m purchase of retail and leisure property in Glasgow, adjacent to existing ownership;

£2.15m acquisition of retail property in York;

£2.25m sale of property in Newcastle. 

Asset Management

Leeds, Merrion Centre - building work is progressing to schedule on the current phase of refurbishment work;

Manchester, Deansgate - development work complete on the substantially pre-let retail element;

Harrogate, West Park - construction work is now well underway on a retail and residential scheme;

Rochdale, Central Retail Park -work on current phase nearing completion; 

Void levels are currently running at 10% reducing to 3% if ongoing refurbishments are excluded.

Developments

Leeds, Eastgate Quarters - land acquisition is proceeding in line with programme and enabling works have commenced. The scheme architects have been appointed;

Leeds, Whitehall Riverside - interest has been received from potential tenants of new office accommodation;

Manchester, Piccadilly Basin - tenants are now in occupation at Carvers Warehouse with less than 6,000 sq ft out of a total 22,000 sq ft of the space remaining to let. Our tenants Building Design Partnership are fitting out their new building ready for occupation this summer.

Financing

Bank facilities in excess of £100m have been agreed until September 2012 (compared to £45m at the time of the Interim Results in February 2008);

At 31 March 2008 the Group had net debt of £214m of which 89% is at fixed rates. Further facilities of £53m are currently available (including the £150m of quoted debenture stock at 5.375% repayable in 2031).

Edward Ziff, Chairman, commenting, said:

"Our well located portfolio, based in the major conurbations of Leeds, Manchester and Glasgow along with our long-term and largely fixed rate debt facilities provides a stable foundation to manage the prevailing market. We believe that difficult conditions are likely to remain for some time and will restrict significant investment in new projects. 

In the meantime, we remain committed to optimising our existing portfolio, managing our major development schemes and adding to our portfolio where suitable opportunities emerge."

.-ENDS-

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