Worsley Inv Ltd Regulatory News (WINV)

6 Feb 2009 09:26

To: Company Announcements

Date: 6 February 2009

Company: AXA Property Trust Limited

Subject: Net Asset Value 31 December 2008

NET ASSET VALUE

The unaudited Company's Consolidated Net Asset Value per share of AXA Property Trust Limited (the "Company") as at 31 December 2008 was 100.21 pence (113.41 pence as at 30 September 2008).

The Net Asset Value attributable to the Ordinary Shares is calculated under International Financial Reporting Standards. It includes all current year income and is calculated after the deduction of dividends paid prior to 31 December 2008, but does not include provision for the quarterly interim dividend of 1 pence per share announced on 5 February 2009 to be paid 27 February 2009.

The £13.20 million decline in Net Asset Value over the quarter ended 31 December 2008 can be analysed as follows:

QUARTERLY NET PROFIT/LOSS

The total net loss for the three months to 31 December 2008 was -£8.16 million (-8.16 pence per share). Key features of the quarterly net loss were: 

- £5.20 million foreign exchange gains relating to fair valuation movements on Euro/Sterling net investment "equity" hedging (£1.19 million for the quarter ended 30 September 2008);

- -£15.55 million unrealised losses on the revaluation of property investments relating to:

-£12.0 million (7.5%) decline in the underlying Euro value of the direct property portfolio valuation; and

-£3.55 million impairment of shareholder loans to the consortium investment Porto Kali. Due to a revision to the forecast performance of the investment as a result of the adverse market conditions, the loan impairment was recorded for accounting purposes to reflect reduced future cash flows and recoverability of the loan.

- £0.93 million deferred tax income arising from a decrease in deferred tax net liabilities as a result of the directly-held property portfolio valuation decline.

"Revenue" profit (net profit excluding capital items being principally foreign exchange gains on the net investment hedging, unrealised losses on the revaluation of property and investments and the related deferred tax) amounted to £1.38 million (£0.85 million for the quarter ended 30 September 2008). 

PROPERTY PORTFOLIO

At 31 December 2008 the directly-held property portfolio was independently valued at £181.27 million (£159.19 million as at 30 September 2008). The -£12.0 million (7.5%) decline in the underlying Euro value of the direct property portfolio valuation was offset by foreign exchange translation gains of (£34.08 million).

The Company's net yield on current market valuation (after acquisition and operating costs) for the three months to 31 December 2008 was 6.4% (6.5% for the 3 months to 30 September 2008).

OTHER MOVEMENTS IN NET ASSET VALUE

There was a £27.18 million decrease in the fair value of derivatives accounted for directly in equity relating to currency forwards (£3.47 million), interest rate swaps (£2.83 million) and net investment hedging (£20.88 million). 

The payment of the first interim dividend reduced the Net Asset Value by £1.0 million.

Foreign exchange translation gains of £23.14 million arose on the favourable movement in the closing Euro/Sterling exchange rate.

DIVIDENDS

The first interim dividend of 1.00 pence per share in respect of the year ended 30 June 2009 was paid on 28 November 2008. The second interim dividend of 1.00 pence per share was declared on 5 February 2009, with a payment date of 27 February 2009.

The second interim dividend is 138.5% covered by revenue profit. The cumulative interim dividends declared to date in respect of the current financial year are 111.8% covered by revenue profit.

LOAN FACILITIES - LOAN TO VALUE COVENANTS

Under the terms of the Company's main loan facility, the maximum permitted Gross Loan to Value (LTV) is 50%. Gross LTV is calculated as debt over property portfolio at fair value. At 31 December 2008 the Gross LTV was 47.0%. A potential further decrease in the Company's property valuations as at 31 December 2008 of over 6% would be necessary to breach the Gross LTV covenant. 

The Company and its subsidiaries held total cash of £21.55 million (EUR 22.29 million) at 31 December 2008, giving a Net LTV of 34.0%. Net LTV is calculated as debt net of cash over property portfolio at fair value. Details are included for information purposes; it does not form part of the loan covenants.

The £21.55 million cash held by the Company at 31 December 2008 has been allocated between working capital and uncommitted capital expenditure of up to £13.53 million, principally to develop the Company's retail asset in Fuerth, Germany. £13.53 million (EUR 14.0 million) remains invested in fixed term deposits which will be realised as required for the capital expenditure programme. If the cash allocated to uncommitted capital expenditure were utilised to repay part of the bank debt, property valuations could potentially decline by a further 22% before breaching the Gross LTV covenant. 

The Company's loans with Calyon are fully hedged at an average rate of 5.21% via interest rate swaps and caps to April 2011 when the loan facility expires.

Under the terms of the Porto Kali consortium investment's loan facility, the maximum permitted Gross Loan to Value (LTV) is 65.0%. At 31 December 2008 the Gross LTV was 68.9% which exceeded the covenant maximum. Discussions with the lender HSH are in progress and the business plan strategy is under review. The loan is without recourse to the Company.

HALF YEAR REPORT AND FINANCIAL STATEMENTS AS AT 31 DECEMBER 2008

Further details of the Company's Net Asset Value and performance will be provided as part of the half year Report and Financial Statements as at 31 December 2008 which are due for release on 27 February 2009. 

All Enquiries: 

Investment Manager

AXA Investment Managers UK Limited

Neil Winward

Tel: 020 7330 6619

Sponsor and Broker

Oriel Securities Limited

Tom Durie

Tel: 020 7710 7600

Company Secretary 

Northern Trust International Fund Administration Services (Guernsey) Limited 

Trafalgar Court 

Les Banques 

St Peter Port 

Guernsey 

GY1 3QL 

Tel: 01481 745529 

Fax: 01481 745085