10 Sep 2020 07:00
10 September 2020
U and I Group PLC
AGM Trading Update
Ahead of today's Annual General Meeting ('AGM'), U+I (LSE:UAI), the specialist regeneration developer and investor, provides the following trading update.
Delivering on the existing development and trading pipeline
U+I has positive news relating to two of its major regeneration projects. In August 2020, U+I secured £23 million in grant funding from the Government's £900 million Getting Building Fund so it can bring forward the first phase of delivery at Mayfield in Manchester. The scheme is expected to deliver c.£80-100 million of profit and c.£40 million in development management fees to U+I over its lifespan to c.2034. At 8 Albert Embankment, U+I's Thames riverside scheme in Lambeth, following a call in by the Secretary of State for Housing, Communities and Local Government, an inquiry date has been set for 1 December 2020. The scheme is expected to deliver c.£25-35 million profit to U+I over its lifespan to c.2026.
As confidence is slowly returning to the market, we have resumed conversations, previously on hold due to the Covid-19 pandemic, across a number of schemes. At The Arts Building, Finsbury Park, we have satisfied the planning condition in the agreement for lease with Lidl for the Ground Floor, a significant milestone for this project. The agreement remains subject to Lidl receiving one final statutory consent. Sales progress at St Mark's Square in Bromley has continued well over the summer with twenty one residential unit sales completing since 31 March 2020, resulting in the repayment of approximately £10 million of the associated debt. At 399 Edgware Road, since 31 March 2020, we have completed thirty one unit sales. There are currently fifty two unsold units remaining, of which nineteen are already under offer.
As well as seeing good momentum across its larger schemes since the start of FY2021, U+I has also made progress across a number of its smaller projects and will update investors at its Interim Results.
Liquidity and efficiencies
U+I has continued its focus on balance sheet strength and liquidity. In addition to the £20.0 million of additional liquidity secured since the year end (announced at the Preliminary Results on 8 July 2020), U+I has now also signed a three-year extension to the maturity of its €47 million of unsecured loan notes to April 2024.
U+I's £4 million cost savings programme remains on track to complete by the end of FY2021, a year early, as the Company proactively focuses on conserving cash and delivering on its existing pipeline through a more efficient approach. This includes the previously announced £33.0 million reduction in development capex in FY2021 and a £1.4 million annualised reduction in staff costs. Its offices and sites are now open; and it is working with its partners to ensure it can continue to safely progress its projects in the necessary timeframes.
Rent Collection
Our rent collection continues to improve. Of the total June quarter rent demanded so far, 74% has either been collected or had alternative payment terms agreed with occupiers.
June quarter retail rent
Collected | 55% |
Monthly outstanding | 9% |
Deferred | 4% |
Re-geared | 6% |
Total collected/alternative payments agreed | 74% |
Deferrals in negotiation | 11% |
Re-gears in negotiation | 6% |
Waived | 5% |
Rent Outstanding | 4% |
Total | 100% |
Rent collected for the March quarter has also increased to 63% at 31 August 2020, from the 60% previously reported at the Preliminary Results, and outstanding rent for the March quarter, where no agreement has been reached or remains under negotiation, has reduced to 5%.
Across our retail and leisure portfolio, 93% of occupiers by gross income are now open. The remainder comprises stores that are either expected to reopen in the coming weeks as occupiers progress their phased re-opening plans (3%) or tenants that are not expected to re-open (4%).
Matthew Weiner, Chief Executive Officer at U+I, said:
"Following on from such a challenging period, it has been a good start to the year for U+I where we have focused on progressing and realising value from our existing portfolio, reaching key milestones across a number of our major regeneration projects, priming them for delivery. Securing the largest single Government grant at Mayfield in Manchester is testament to the quality of our schemes and alignment with Government's Build, Build, Build agenda, prioritising 'shovel-ready' schemes that will benefit local communities and economies. This grant also reinforces the relevance of our business model in the UK's post Covid-19 economic plan which, combined with the momentum we have seen at the start of FY2021 and continued progress in our efficiencies programme, give us confidence in the long term outlook for U+I."
ENDS
For further information, please contact:
U+I
Nicola Krafft
+44 (0) 20 7828 4777
ir@uandiplc.com
Camarco (Financial PR Adviser)
Geoffrey Pelham-Lane / Tom Huddart
+44 (0)20 3757 4985 / 4991
uandi@camarco.co.uk
About U+I
U+I is a specialist regeneration developer and investor.
With a >£10.8 billion portfolio of complex, mixed-use, community-focused regeneration projects including a £130.6 million investment portfolio, we are unlocking urban sites bristling with potential in the London City Region (within one hour's commute from Central London), Manchester and Dublin. We exist to create long-term socio-economic benefit for the communities in which we work, delivering sustainable returns to our shareholders.
To find out more, visit www.uandiplc.com or follow us @uandiplc