TIDMWAFR
RNS Number : 7218W
Walls & Futures REIT PLC
27 April 2021
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF
SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF REGULATION 11 OF THE MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS
2019/310.
27 April 2021
WALLS & FUTURES REIT PLC
("Walls & Futures" or the "Company")
Trading Update
Walls & Futures is an Ethical Housing investor on a mission
to address the unfulfilled demand for specialist supported housing
in the UK. The Company designs, funds and develops specialist
supported housing ("SSH") which are let on full repairing and
insuring ("FRI"), inflation linked leases to local authorities,
registered providers and charities.
The Directors of Walls & Futures (the "Board") are pleased
to provide a trading update for the year ended 31 March 2021.
Highlights
-- Net Asset Value ("NAV") as at 31 March 2021 of 102p per share
- a fall of 4.95% from 31 March 2020
-- Outperformed 2020 benchmark MSCI UK Residential Property Index by 519% (3.53% vs. 0.57%)
-- 100% of SSH rents collected in financial year
-- Generated over GBP1.3m cash through sale of two Private
Rented Sector ("PRS") properties with funds to be invested in new
SSH
-- Repaid entire GBP 600,000 revolving credit facility
Performance
Against the challenging economic backdrop caused by Covid-19,
which has seen many property companies experience non-payment of
rents and significant falls in asset values, we are pleased with
the robust performance of our portfolio.
For the 12 months to 31 March 2021, we collected 100% of the SS
H and 99.97% of PRS rents due .
Part of our strategy, as we have previously outlined, has
involved selling our London PRS properties, which were let on
Assured Shorthold Tenancies ("AST"), to fund further SSH
investments. These sales were delayed by emergency legislation
introduced by the government to protect tenants on AST, with notice
periods increased to six months. Working with our tenants, we
completed the sale of two of the three properties in our
portfolio.
Our Wimbledon property completed in June 2020 for a sale price
of GBP656,000 and was followed by one of our Southfields properties
which completed in January 2021 for GBP660,000. This generated a
total of GBP1,136,000 in cash before fees, part of which was used
to pay down our GBP600,000 revolving credit facility in full. The
remaining Southfields property is currently on the market and we
will provide a further update in due course. For so long as the
Company remains in an offer period any sale of the property would
be subject to shareholder approval in general meeting, in
accordance with the requirements of Rule 21.1 of the City Code.
The Board has obtained a valuation of our property assets as at
31 March 2021 by John D. Wood & Co which shows a total value of
the three properties of GBP3,215,000. The valuation was prepared in
accordance with valuation standards published by the Royal
Institution of Chartered Surveyors on a basis consistent with past
practice in relation to the assets concerned. The Board confirms
that the valuer has confirmed that an updated valuation as at 27
April 2021 would not be materially different. The valuation report
can be viewed by clicking here,
http://www.rns-pdf.londonstockexchange.com/rns/7218W_1-2021-4-27.pdf
.
The valuation reflects that there has been a modest fall in the
value of our remaining PRS property, which the Board considers to
be a consequence of the issues the PRS sector is having as a result
of the financial effects of the pandemic. Our two SSH assets have
remained at the same valuation as at 31 March 2020. As at 31 March
2021, after taking account of GBP658,468 of cash and cash
equivalents and making appropriate balance sheet adjustments, which
have been subject to management review, the Company's unaudited Net
Asset Value ("NAV") fell by 4.95% to 102p per share (31 March 2020:
107p per share), reflecting current weakness in the London PRS
market, while our SSH portfolio continued to hold up well in the
existing market. No provision has been made for any tax liability
on eventual sale of the properties as no tax will be payable due to
the Company being a REIT.
Further supporting the resilience of our portfolio and
investment strategy, we are delighted to announce that for the 2020
calendar year, our portfolio outperformed the benchmark MSCI UK
Residential Property Index delivering a total return of 3.53% vs
0.57%. This is the fourth consecutive year we have outperformed the
benchmark.
In respect to the Social Housing market, the Regulator of Social
Housing ("RSH") has taken a more active role due to the number of
private companies investing in the sector.
RSH has concluded that in certain cases providers are not
compliant with the rent standard and/or have been unable to provide
adequate assurances that the accommodation they provide meets the
government's definition of SSH and/or do not meet governance and/or
viability requirements. The RSH has issued judgements and notices
against a number of registered social housing providers for
breaches.
We welcome the increased involvement from the RSH as our ethical
approach to investing ensures our focus on delivering high quality
homes which can adapt with the residents needs at a rent level that
is sustainable and offers value for money to the public purse.
Furthermore, the Board believes that none of our existing
supported housing partners or (those that we are currently in
discussion with) are subject to regulatory reviews, judgements or
notices.
Statement re unsolicited offer
While our share price has continued to trade at a large discount
to the Company's NAV, the Board believes this disparity is a
function of the market being focused away from the property sector,
rather than reflecting the performance of the underlying business.
The Board considers that the unsolicited firm offer from Virgata
Services Ltd ("Virgata") ("the Firm Offer") is opportunistic in the
light of the recent share price weakness. As stated in our
announcement on 8 April 2021, the Board considers that the Firm
Offer substantially undervalues the Company at 50p per share, less
than half the unaudited NAV per share reported today. The Board
notes the deadline for Virgata to publish its offer document by 6
May 2021 and the Company will publish its defence document within
14 days of the publication of the Virgata offer document. The Board
recommends that shareholders take no action until it has received
the defence document from the Company.
A further announcement will be made as and when appropriate.
Enquiries:
Walls & Futures REIT PLC 0333 700 7171
Joe McTaggart, Chief Executive
Website www.wallsandfutures.com
Allenby Capital Limited (Corporate and Financial Adviser)
Nick Harriss/James Reeve/David Worlidge 020 3328 5656
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is
interested in 1% or more of any class of relevant securities of an
offeree company or of any securities exchange offeror (being any
offeror other than an offeror in respect of which it has been
announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement
of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An
Opening Position Disclosure must contain details of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or
becomes, interested in 1% or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than 3.30 pm
(London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk ,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Takeover Panel's Market
Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as
to whether you are required to make an Opening Position Disclosure
or a Dealing Disclosure.
Additional information
Allenby Capital Limited ("Allenby Capital"), is authorised and
regulated by the Financial Conduct Authority in the United Kingdom.
Allenby Capital is acting as financial adviser exclusively for
Walls & Futures and no one else in connection with the matters
set out in this announcement and will not regard any other person
as its client in relation to the matters set out in this
announcement and will not be responsible to anyone other than Walls
& Futures for providing the protections afforded to clients of
Allenby Capital or its affiliates, or for providing advice in
relation to the contents of this announcement or any other matter
referred to herein.
Publication on a website
In accordance with Rule 26.1 of the Code, a copy of this
announcement and the valuation prepared by John D. Wood & Co
will be available at https://reit.wallsandfutures.com/investors/ .
The content of the website referred to in this announcement is not
incorporated into and does not form part of this announcement.
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