Wt Wner Usd Regulatory News (WNER)

15 Feb 2008 07:00

Warner Estate Holdings PLC15 February 2008 Warner Estate Holdings PLC ("Warner Estate" or "Group") Interim Management Statement Warner Estate reports that, following the results for the half year to 30September 2007, announced on 30 November 2007, the Group has continued togenerate satisfactory levels of realised profit. Whilst the Directors concurwith the market sentiment that property values have fallen since the 30September 2007, the outward movement in yields does not reflect the Group'sexperience of the occupational market. Rental income across the Group'sportfolio, both owned and managed, continues to increase with rental valuesimproving across all sectors. The Group does not carry out a quarterly valuation and the next full revaluationwill be prepared as at the Group's year end of 31 March 2008. However,valuations were carried out as at 31 December 2007 on the Ashtenne IndustrialFund (AIF) and the Apia Regional Office Fund (Apia), where the Group is assetmanager, and on the Greater London Office (GLO) joint venture. In the quarterto 31 December, property values fell by 4.30% in AIF, 6.04% in Apia and 3.8% inGLO. The impact of these revaluations, which covered 22% of the Group's equityportfolio, was to reduce the Group's 30 September 2007 adjusted NAV per share of766p by 25.5p, of which 22p related to the funds and the balance to the Group'sshare of the GLO joint venture. A table analysing the valuations of AIF andApia is shown in the appendix below. The Group will not receive a performance fee in respect of Apia's results to 31December 2007 even if the fund out performs its benchmark, because a minimumabsolute return of 10% has to be achieved. However, the performance of the fundhas not triggered any claw back of prior years' performance fees. In the caseof AIF, the performance fees are not subject to any claw back provisions and arebased on the relative performance of the fund against its benchmark over athree-year rolling period. The amount, if any, of performance fee due for thisyear will be established once the IPD benchmark figures for this fund have beenpublished later in this quarter. Progress continues with the Group's development programme with further lettingsin Folkestone and Bolton. Debenhams have been secured as the 80,000 sq ftanchor store for the 360,000 sq ft multi-million pound Waterside Shopping schemein Aylesbury. The Group's net debt had reduced to £359million at 31 December 2007 (30September 2007: £366million). Falling interest rates reduce the Group's annualcosts by £0.7million for every 25 bps fall and, following the latest cut in BaseRate, the Group's average cost of debt has fallen to 5.83% (September 2007:6.48%). Since September, the Group has continued to take advantage of hedgingopportunities to utilise lower long term interest rates and to reduce exposureto interest rate movements. The Group and its joint ventures comply with all their banking covenants andmaintain sufficient headroom within their facilities to meet ongoing workingcapital requirements. In January, the Group renewed a £30million facility withan increase in margin of 17.5bps. In addition, the Agora joint venture withBank of Scotland has agreed a new £35million facility with its banking syndicateto fund the 100,000 sq ft redevelopment of Market Place, Bolton. The Group expects further outward movement in yields during the current quarterand remains cautious due to continuing uncertainty in financial markets.Nevertheless, revenue continues to improve and the Group is well financed tomaintain progress with property under management. Appendix - Valuation of AIF and Apia Funds The unit values of the Ashtenne Industrial Fund Unit Trust, and the ApiaRegional Office Fund Unit Trust as at 31 December 2007 were as follows: Impact 3 months Valuation of Unit value Units owned Value of on to properties at Unit value Underlying Change by holding Change in Warner at in Warner Estate 31 December 31 December 31 December Valuation Estate 31 value in the 30 unit December NAV per 2007 2007 2007 September change value 31 December quarter 2007 (geared) 2007 2007 shareAIF £1,054,550,000 £1.7335 £1.8905 (4.30)% (8.31)% 23,404,752 40,571,623 (£3,676,091) (£0.07)Apia £470,770,000 £1.2644 £1.4242 (6.04)% (11.22)% 52,283,671 66,105,173 (£8,357,231) (£0.15) 12 months Valuation of Unit value Unit value properties to at at Underlying Change 31 December valuation in unit 31 December 31 December 31 change value 2007 2007 December (geared) 2007 2006AIF £1,054,550,000 £1.7335 £1.8883 (4.46)% (8.20)%Apia £470,770,000 £1.2644 £1.4147 (4.50)% (10.63)% Notes: 1. The underlying valuation change shows the increase/(decrease) in the valueof the portfolio as a percentage of opening value adjusted for additions anddisposals, over the year as both funds have a year end of 31 December. 2. The change in unit value reflects the movement in the capital value(excluding the impact of debt mark to market adjustments) of the fund over theyear. Investors separately benefit from quarterly distributions of net incomeand periodic capital distributions. The unit price at 31 December 2007 is theindicative price issued by Morley Fund Management to investors in those funds. - ends - Date: 15 February 2008 Warner Estate Holdings PLC City ProfilePhilip Warner, Chairman Simon CourtenayPeter Collins, Finance Director Tel: 020-7448-3244Michael Stevens, Property DirectorTel: 020-7907-5100Web: www.warnerestate.co.uk This information is provided by RNS The company news service from the London Stock Exchange