28 November 2024
abrdn European Logistics Income plc
Unaudited Net Asset Value as at 30 September 2024 and
declaration of a Third Interim Dividend
28 November 2024 - abrdn
European Logistics Income plc (the "Company" or "ASLI"), the
Company which is invested in a diversified portfolio of European
logistics real estate, announces its unaudited Net Asset Value
("NAV") for the quarter ended 30 September 2024. The NAV is
presented both including and excluding estimated property disposal
and SPV liquidation costs providing enhanced disclosure. Further
details can be found below.
Summary
-
NAV per Ordinary share on a like-for-like basis,
including full provision of portfolio
disposal and structure liquidation costs, decreased by 0.3% to
87.6c (GBp - 73.2p) (30 June 2024: 87.9c (GBp - 74.4p))
-
IFRS NAV per Ordinary share, excluding disposal and liquidation costs, increased
3.4% to 90.9c (GBp - 76.0p) (30 June 2024: 87.9c (GBp -
74.4p))
-
In line with the IFRS NAV, EPRA Net Tangible
Assets increased by 4.2% to 93.5c per Ordinary share (30 June 2024
- 89.7c)
-
The portfolio valuation remained stable at €607.45
million (30 June 2024: €607.35 million)
-
The Company partially repaid €2.9 million of its
variable loan with ING Spain and reduced hedging exposure by the
same amount. Loan to Value ('LTV') is 38.2% with fixed debt
facilities of €245.6 million at an average all-in interest rate of
1.99%
-
Accretive leasing activity with two new lettings
concluded at Getafe, Spain. Existing tenant MCR has more than
doubled its space requirements relocating into a 16,500 sq metre
unit for a 7 year term. Simultaneously, Molecor signed a 5
year lease for the former MCR unit.
Managed Wind-Down
Under the shareholder approved
managed wind-down process, the Company's new investment objective
is 'to realise all existing assets in the Company's portfolio in an
orderly manner'.
During the quarter, the Company
sought and received court approval to cancel the full amount
standing to the credit of its share premium account. The amount of
Eur 269.5 million has been applied to a special distributable
reserve and will be available for capital distributions as
sufficient cash is generated from asset sales.
On 22 November 2024 approval was
granted by Shareholders for the Company to issue and redeem up to
£300 million of B Shares. The Board believes that one of the
fairest and most efficient ways of returning substantial amounts of
cash to Shareholders is by means of a bonus issue of redeemable B
Shares (with a nominal value of one penny each) which would then be
immediately redeemed by the Company in consideration for a cash
payment equal to the amount treated as paid up on the issue of the
B Shares.
The quantum and timing of any
return(s) of capital to Shareholders under a B Share Scheme will be
at the discretion of the Board and will be dependent on the
realisation of the Company's investments and its liabilities,
general working capital requirements and the amount and nature
(from a tax perspective) of its distributable reserves. The
adoption of a B Share scheme will not limit the ability of the
Company to return cash to Shareholders by using other mechanisms
and, if the B Share scheme is adopted, the Board will continue to
review its tax effectiveness and cost efficiency over time. An
initial return of capital is expected by early 2025 at the
latest.
The Manager has commenced sales
processes for six assets and current indications are that there is
a good level of interest across the range of quality warehouses
that the Company owns. The Manager is in advanced stages regarding
the disposal of three assets with letters of intent expected to be
signed shortly and further details on disposals will be released as
these conclude. Sales processes for a further three assets are due
to commence in early-January.
Net
Asset Value Calculation Methodology
Following the shareholder vote
against continuation and the approval of the managed wind-down
process, the financial statements in the Half Year Report published
on 26 September 2024, were prepared on a basis other than going
concern. As indicated in the Half Year Report, the Board and the
Manager have discussed the appropriate accounting treatment with
the Company's auditor in advance of the publication of the
statutory financial statements for the year ending 31 December
2024. IFRS offers limited guidance on the preparation of the
financial statements on a basis other than going concern and how
this should differ from those prepared on a going concern basis. In
seeking to provide the most prudent, relevant and reliable
financial information to Shareholders, the Board made provision in
the financial statements in the Half Year Report, for the estimated
costs of the disposal of the property portfolio, the early
repayment of bank debt and the winding up of the Company and its
underlying SPVs.
The auditor has advised that, in its
opinion, IFRS does not permit the Company to make provision for the
above noted costs. Accordingly, the audited financial
statements for the year ending 31 December 2024 will not include a
provision in relation to property disposal and SPV liquidation
costs. In order to provide Shareholders with enhanced disclosure,
the Company has therefore prepared its quarterly net asset value
both including and excluding liquidation costs.
Performance
For Q3 2024, the portfolio valuation
remained stable at €607.45 million (30 June 2024: €607.35
million).
The independent unaudited external
valuation of the Company's property portfolio undertaken by Savills
(UK) Limited increased by €100k, or 0.02%, in the quarter. The
Dutch and Spanish assets saw small increases in aggregate
valuations of 0.1% and 0.2% respectively, Polish and German assets
in aggregate declined in value by 0.2% and 0.5% respectively and
there was no change in the valuation of the Company's French
assets.
As at 30 September 2024, the
Company's share price was 61.0p, and as at the date of this
announcement the share price was 57.8p.
Leasing
Effective from 15 October 2024, MCR
moved from its location at the Company's Unit 2B asset (7,718 sq
metres) in Getafe, Madrid, taking up the tenancy at the vacant Unit
3A with increased space of 16,500 sq metres. The agreed rent per
annum is €1,039,500 and the lease is for a 7 year term with upward
only CPI movements. MCR's previous lease for Unit 2B had an
approaching lease break in June 2025.
Simultaneously, Molecor, an international company in solutions
for infrastructure, building and waste treatment, has taken up the
tenancy at Unit 2B agreeing a 5 year lease with an annual rent per
annum of €509,388, with upward only CPI adjustments.
This accretive leasing activity
improves the Company's WAULT and further enhances the positioning
of the portfolio in Getafe, Madrid ahead of a planned disposal in
2025.
Rent
Collection
As at the date of this announcement,
94% of the expected rental income for the quarter ended 30
September 2024 has been collected. Overall tenants remain stable
and arrears are expected to be collected in due course as new
leases are agreed and signed.
Debt
Financing
At the end of the quarter, the
Company's fixed rate debt facilities totalled €245.6 million at an
average all-in interest rate of 1.99%, with the earliest
refinancing of debt due in mid-2025. The loan-to-value at period
end was 38.2%.
Interim Dividend
A second interim distribution in
respect of the year ending 31 December 2024 of 0.90 euro cents
(0.77 pence) was paid to shareholders on 27 September
2024.
The Board today declares a third
interim distribution of 1.05 euro cents (equivalent to 0.87 pence)
per Ordinary share, in respect of the year ending 31 December 2024
(2023: 1.41 euro cents), payable in sterling on 31 December 2024 to
Ordinary shareholders on the register on 6 December 2024
(ex-dividend date of 5 December 2024).
Of this third interim distribution
declared of 0.87 pence per Ordinary share, 0.50 pence (equivalent
to 0.60 euro cents) is declared as dividend income with 0.37 pence
(equivalent to 0.45 euro cents) treated as qualifying interest
income.
Breakdown of NAV Movement
Set out below is a breakdown of the
change to the unaudited net asset value per Ordinary Share over the
period from 1 July 2024 to 30 September 2024. To aid
shareholder information, the Company has prepared its quarterly
unaudited net asset value both including
and excluding the estimated costs of asset
disposals and liquidation of the company structure.
EPRA Net Tangible Assets per share is
93.5 euro cents, which excludes deferred tax liability.
|
|
Per share (€
cents)
|
Attributable assets
(€m)
|
Comment
|
|
Net assets at 30 June 2024 per
Company announcement dated 23 August 2024 including liquidation & disposal costs
|
87.9
|
362.4
|
|
|
Add back Second Interim Dividend
paid on 5 July 2024
|
1.4
|
5.8
|
|
|
Net assets as at 30 June 2024 per
published Half Year Report including
liquidation & disposal costs
|
89.3
|
368.2
|
|
|
Unrealised and realised decrease in
valuation of property portfolio
|
-
|
0.1
|
Portfolio of 25 assets, capital
values of investments remained stable during the
quarter.
|
|
Income earned for the
period
|
2.0
|
8.2
|
Income from the property portfolio
and associated running costs.
|
|
Expenses for the period
|
(0.9)
|
(3.9)
|
|
Deferred tax liability
|
(0.3)
|
(1.4)
|
Net deferred tax liability on the
difference between book cost and fair value of the portfolio and
other temporary tax differences.
|
|
Interest rate swaps and caps/floors
mark to market revaluation
|
(0.2)
|
(0.9)
|
Movement in the mark to market value
of interest rate swaps.
|
|
First interim dividend paid on 5
July 2024
|
(1.4)
|
(5.8)
|
First interim dividend 2024 of 1.41
euro cents per Ordinary share
|
|
Second interim dividend paid on 27
September 2024
|
(0.9)
|
(3.7)
|
Second interim dividend 2024 of 0.90
euro cents per Ordinary share
|
|
Foreign currency gain /
(loss)
|
-
|
0.3
|
FX translation
|
|
Net assets at 30 September 2024
including liquidation & disposal
costs
|
87.6
|
361.1
|
|
|
Estimated costs associated with
disposal of portfolio and liquidation of the Company
structure
|
3.3
|
13.7
|
|
|
Net assets at 30 September 2024
excluding liquidation & disposal
costs
|
90.9
|
374.8
|
|
Net
Asset Value analysis as at 30 September 2024
(unaudited)
|
|
€m
|
% of net
assets
|
|
Fair value of Property Portfolio*
|
604.1
|
161.2%
|
|
Cash
|
20.4
|
5.4%
|
|
Other Assets
|
18.0
|
4.8%
|
|
Total Assets
|
642.5
|
171.4%
|
|
External Debt
|
(243.9)
|
-65.1%
|
|
Other Liabilities
|
(12.2)
|
-3.3%
|
|
Deferred tax liability
|
(11.6)
|
-3.0%
|
|
Total Net Assets excluding liquidation and disposal
costs
|
374.8
|
100.0%
|
*After lease incentive
adjustment.
The NAV per share as at 30 September
2024 is based on 412,174,356 shares of 1 pence each, being the
total number of Ordinary shares in issue at that time. As at
the date of this announcement, the Company's share capital consists
of 412,174,356 Ordinary shares with voting rights.
The Board is not aware of any other
significant events or transactions which have occurred between 30
September 2024 and the date of publication of this statement which
would have a material impact on the financial position of the
Company.
Details of the Company and its
property portfolio may be found on the Company's website
at: http://www.eurologisticsincome.co.uk
For
further information please contact:
abrdn Fund Managers
Limited
Ben
Heatley
+44 (0) 20 7156 2382
Investec Bank
plc
+44 (0) 20 7597 4000
David Yovichic
Denis Flanagan
FTI
Consulting
+44 (0) 20 3727 1000
Dido Laurimore
Richard Gotla
Oliver Parsons