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29 Aug 2017 13:23
AXA Property Trust Ltd - Net Asset Value 30 June 2017 (Unaudited)AXA Property Trust Ltd - Net Asset Value 30 June 2017 (Unaudited)
PR Newswire
London, August 29
To: Company AnnouncementsDate: 29 August 2017Company: AXA Property Trust LimitedSubject: Net Asset Value 30 June 2017 (Unaudited)
CAPITAL REDEMPTION
During the Financial year ending 30 June 2017 the Company returned £24.0 million capital to Shareholders by means of two capital redemptions: £18.4 million on 17 February 2017 and £5.6 million on 23 June 2017, bringing the total capital returned to Shareholders to £48.1 million.CORPORATE SUMMARY
The Company’s unaudited Consolidated Net Asset Value as at 30 June 2017 was £15.83 million and the NAV per share was 67.65 pence. This reflects a slight increase of 0.98 pence per share compared to 31 March 2017 when the NAV per share was 66.67 pence (consolidated Net Asset Value was £21.21 million) and a decrease of 1.28 pence per share compared to 31 December 2016 (consolidated Net Asset Value was £39.69 million). The Company and its subsidiaries made a net loss after tax of £1.36 million for the twelve month period ended 30 June 2017 and a loss of £0.75 million in the three month period ended 30 June 2017.MANAGED WIND-DOWN STATUS
During the year disposals of all but one of AXA Property Trust Limited’s properties were completed for aggregated sales proceeds of €52.67 million The sales completed over the past 12 months leave one asset to be disposed of. Despite ongoing marketing, this last sale has been difficult to realise and although interest is being followed up, it is considered a sale may not now materialise until the first half of 2018.PORTFOLIO UPDATE
The sole remaining asset comprises the cinema investment in Curno, Italy.
| Investment name | Country | Sector | Percentage of portfolio |
| Curno, Bergamo | Italy | Leisure | 100% |
Despite the challenging liquidity constraints, the tenant remains committed to the location and cash flow generation is strong, with rents. There are currently no unforeseen expenditure requirements.
MARKET UPDATE
Eurozone GDP growth accelerated by a seasonally adjusted 0.6% quarter-on-quarter (q-o-q) in Q1 2017, the fastest rate of growth in two years. Household consumption and fixed investment were the main drivers, whereas imports offset exports, with the net result that the external sector provided a neutral contribution to growth. Among the major Eurozone economies, Spain remained the strongest performer, with GDP growth reaching 0.8%, followed by Germany (0.6%), France (0.5%) and Italy (0.4%). In contrast, GDP growth in the UK slowed to 0.2% in Q1 2017, its weakest quarter since Q1 2016, partly in response to a rise in inflation and a weakening of growth in the large services sector. Having increased to 2% in February 2017, harmonised CPI in the Eurozone had moderated to 1.3% in June, largely because energy prices rises decelerated. Harmonised CPI in the UK declined from 2.9% in May to 2.6% in June. Growth appears to have picked up further momentum in the Eurozone in Q2, according to recent data and surveys that point to rising output and greater confidence.
Despite stronger momentum in the first half of the year, Eurozone GDP is forecast to grow at around the same rate in 2017 as in 2016 (1.8%). Higher inflation and political uncertainty - notably as a result of Article 50 being triggered by the UK government in March 2017 and elections during the year in the Netherlands, France, the UK, Germany and, potentially, Italy - are expected to affect spending by both businesses and households. Consumer spending is expected to remain a key driver of economic growth but, in the absence of strong wage growth, higher inflation (forecast to be 1.6% in 2017, after 0.2% in 2016) is projected to have an overall negative impact on growth. However, exports are expected to increase, reflecting a strengthening and broadening of the global recovery. Although there is still considerable disparity in conditions, some convergence between GDP growth rates in Eurozone countries is expected. While still low by historical standards, long-term government bond yields are forecast to rise modestly in 2017, in a continuation of the pattern seen in the final quarter of 2016. However, increased volatility is expected throughout 2017, given the wider geo-political risks and the uncertain outlook for asset-purchase tapering and interest rate normalisation.
Italy's GDP growth accelerated from 0.3% quarter-on-quarter (q-o-q) in Q4 2016 to 0.4% in Q1 2017. Growth was driven by an acceleration in inventory building and household spending, with the latter boosted by a rise in employment; the unemployment rate stood at 11.3% in May 2017, after peaking at 13% in November 2014. However, fixed investment and net exports contributed negatively to growth.
Italy's economy faces some severe headwinds and underlying growth momentum is weak; AXA IM’s forecast is for GDP growth of 1.2% in 2017 as a whole, after 1% in 2016, one of the weakest growth rates in the Eurozone. A key risk is Italy’s fragile banking sector. In June, the European Commission approved the use of Italian public funds for a precautionary recapitalisation of Monte dei Paschi di Siena and the liquidation of two failing regional banks. While these plans will remove bad loans, improve confidence and increase consolidation in Italy’s banking sector, they will also increase public debt, and there is a risk that other regional banks may yet need aid. There is also a risk that continued political uncertainty and the government’s narrow agenda will constrain economic growth. General elections are required by early 2018. Matteo Renzi won back control of the ruling Democratic Party (PD) in an April 2017 primary and the PD and populist Five Star Movement (M5S) are currently leading national polls. However, while Forza Italia (FI) and the Northern League (LN) are currently trailing far behind, their popularity has increased according to recent polls and candidates from FI and LN won several key municipal elections in June.
CONSOLIDATED PERFORMANCE SUMMARY
| Audited | Unaudited | |||
| Year ended 30 June 2016 | 30 June 2017 | Quarterly Movement | ||
| Pence per share | Pence per share | Pence per share /(%) | ||
| Net Asset Value per share | 67.20 | 67.65 | 0.45 | 0.67% |
| Share price (mid-market) | 55.13 | 61.25 | 6.12 | 11.10% |
| Share price discount to Net Asset Value | 18.0% | 9.5% | -8.5 percentage points | |
| Total annual return | Audited | Unaudited |
| Year ended 30 June 2016 | Year ended 30 June 2017 | |
| Net Asset Value Total Return | 11.2% | 2.9% |
| Share Price Total Return | ||
| - AXA Property Trust | 29.6% | 23.0% |
| - FTSE All Share Index | 2.2% | 18.1% |
| - FTSE Real Estate Investment Trust Index | -8.3% | 9.2% |
| Source: AXA Investment Managers UK Limited and Stifel Nicolaus Europe Limited. | ||
Total net loss was £1.35 million (-2.82 pence per share) for the twelve months to 30 June 2017, analysed as follows:
| Unaudited | Unaudited | Unaudited | |
| 6 months ended | 6 months ended | 12 months ended | |
| 31 December 2016 | 30 June 2017 | 30 June 2017 | |
| £million | £million | £million | |
| Net rental and related income | 1.39 | 0.65 | 2.04 |
| Valuation loss on investment properties | (0.68) | (0.40) | (1.07) |
| Loss on disposal of a subsidiary and investment properties | (0.65) | (0.58) | (1.23) |
| General and administrative expenses | (0.41) | (0.44) | (0.85) |
| Operating loss | (0.34) | (0.77) | (1.11) |
| Net foreign exchange gain | 0.29 | (0.31) | (0.03) |
| Net gain on financial instrument | 0.06 | (0.04) | 0.02 |
| Share in profit of a joint venture | 0.05 | (0.01) | 0.04 |
| Net finance cost | (0.19) | 0.02 | (0.17) |
| Loss before tax | (0.13) | (1.12) | (1.25) |
| Income tax expenses | (0.20) | 0.10 | (0.10) |
| Loss for the period | (0.34) | (1.02) | (1.35) |
The Company will be releasing further details in its audited Annual Report and Financial Statements for the year ended 30 June 2017.
NET ASSET VALUE
The Company’s unaudited Consolidated Net Asset Value as at 30 June 2017 was £15.83 million and the NAV per share was 67.65 pence per share. This reflects an slight increase of 0.98 pence per share compared to 31 March 2017 when the NAV per share was 66.67 pence per share (consolidated Net Asset Value was £21.21 million) and a decrease of 1.28 pence per share compared to 31 December 2016 (consolidated Net Asset Value was 39.69 million).
The Net Asset Value attributable to the Ordinary Shares is calculated under International Financial Reporting Standards. It includes all current year income after the deduction of dividends and capital return paid prior to 30 June 2017.
The variation of Net Asset Value over the 6-month period ended 30 June 2017 can be analysed as follows:
| Unaudited | Unaudited | Unaudited | |
| 6 months ended | 6 months ended | 12 months ended | |
| 31 December 2016 | 30 June 2017 | 30 June 2017 | |
| £million | £million | £million | |
| Opening Net Asset Value | 38.69 | 39.69 | 38.69 |
| Net (loss) / profit after tax | (0.34) | (1.02) | (1.35) |
| Unrealised movement on derivatives | - | - | - |
| Share Redemption | - | (24.00) | (24.00) |
| Foreign exchange translation gains | 1.33 | 1.17 | 2.50 |
| Closing Net Asset Value | 39.69 | 15.83 | 15.83 |
On a like-for-like basis the Euro valuation of the property portfolio decreased by 1.4% to €14.0 million for the quarter compared to previous quarter (€14.2 million) and by 3% compared to 31 December 2017 (€14.5 million).
£/€ foreign exchange rate applied to the Company’s Euro investments in its subsidiary companies at 30 June 2017 was 1.1389 (1.1689 at 31 March 2017 and 1.1680 at 31 December 2016).
FUND GEARING
The bank loan from CA-CIB Crédit Agricole and Crédit foncier was fully repaid in December 2016 prior to the loan maturity, using sales proceeds from Agnadello transaction. As at 30 June 2017 the Company has no outstanding bank loan.
MATERIAL EVENTS
Except for those noted above, the Board of the Company is not aware of any significant event or transaction which occurred between 30 June 2017 and the date of the publication of this Statement which would have a material impact on the financial position of the Company.
Company website:
http://www.axapropertytrust.com
All Enquiries:
Real Estate Adviser AXA Real Estate Investment Managers UK LimitedBroker Services7 Newgate StreetLondon EC1A 7NX
Tel: +44 (0)20 7003 2345Email: broker.services@axa-im.com
Broker
Stifel Nicolaus Europe Limited150 CheapsideLondon EC2V 6ETTel: +44 (0)20 7710 7600
Company Secretary
Northern Trust International Fund Administration Services (Guernsey) LimitedPO Box 255Trafalgar CourtLes BanquesSt Peter PortGY1 3QLTel: +44 (0)1481 745324