PNS Panther Securities Plc

 
TIDMPNS 
 
13 October 2011 
 
                            Panther Securities PLC 
 
                            ("Panther" or "Group") 
 
Interim management statement for the three month period ended 30 September 2011 
 
Panther is pleased to publish its Interim Management Statement for the three 
month period ended 30 September 2011. The results for the six months ended 30 
June 2011 were announced on 23 August 2011 and posted to shareholders shortly 
thereafter. These interim results included extensive information on post 
balance sheet events which overlap with the period we are now reporting upon 
(as all material post items were already announcement). For clarity we are 
repeating this information but in a slightly abbreviated version. 
 
The main transactions and eventsof the period have been: 
 
Finance 
 
  * In July 2011 we finally completed our refinancing package. This is a new 5 
    year club loan facility of GBP75,000,000 provided equally both by HSBC and 
    Santander. This replaced a facility of GBP42,500,000 with HSBC with whom we 
    have had an excellent banking relationship for over 30 years. 
 
  * The additional finance has already allowed us to expand and make several 
    purchases. 
 
  * Financial derivatives show a combined liability of GBP17.5 million as at 30 
    September 2011. This is compared to the combined liability of GBP9.3 million 
    as at 31 December 2010 being the last audited results and GBP10.0 million as 
    shown in our half year accounts ended 30 June 2011. As mentioned previously 
    by the Board, the valuations of financial derivatives are based on market 
    estimations of future interest rates, which have in recent times been very 
    erratic over short periods. It has been considerably more volatile in the 
    last few months due to the economic outlook across Europe. The Board 
    believes that these are an effective `cash' hedge for the GBP60 million drawn 
    borrowings of the Group. It is unlikely that the Group would willingly pay 
    the estimated premium to exit these financial instruments. 
 
These Purchases 
 
  * Five Department Stores. In July 2011, we purchased five freehold properties 
    which were owned and formerly occupied by the Anglia Regional Co-operative 
    Society ("ARCS") Limited trading as Westgate Stores. The majority of the 
    trade and assets of Westgate Stores were recently acquired by Beale PLC, a 
    fully listed department store group in which Panther holds just under 20 
    per cent. of the issued share capital. The Company paid approximately GBP 
    7,330,000 (including stamp duty) for the following five properties. 80 
    Newgate Street, Bishop Auckland, County Durham; 49 Low Street, Keighley, 
    West Yorkshire; 53-57 High Street, St Neots, Cambs; Market Place/ Bridge 
    Street, Spalding, Lincolnshire; and 8 Market Place, Diss, Norfolk. 
 
  * Apart from 80 Newgate Street, Bishop Auckland which as a one year rent free 
    period (ends on 21 May 2012), these four other stores have a two year rent 
    free period which ends on 21 May 2013. The total rent to be received from 
    Beale PLC on the expiration of the rent free periods will be GBP675,000 per 
    annum. 
 
  * Templegate House, 115-123 High Street, Orpington. This property was 
    purchased in July 2011 and is a long leasehold (94 years remaining at a 
    peppercorn) modern building which contains five shops and 17,000 sq ft of 
    office space over the three floors above. The property is almost fully let 
    and produces rent of GBP276,000 per annum. The price we paid of GBP1,300,000 
    (including stamp duty) reflects the fact that two of the larger tenants' 
    leases expire towards the end of this year. The property was purchased from 
    an LPA receiver. 
 
  * 79/97 Commercial Street, Batley. This freehold property also purchased in 
    July 2011 is well positioned in the town and was purchased for GBP1,380,000 
    (including stamp duty). The property currently produces GBP143,000 per annum, 
    excluding the potential income from two vacant shops. The tenants include 
    Boots, the Card Factory, Coral Estates, TUI UK and Kirkwood Hospice. 
 
  * The Mill and Warehourse, Upper Mills Trading Estate, Bristol Road, 
    Stonehouse. In August 2011, we purchased this 13,000 sq ft office, with 
    adjoining 12,000 sq ft warehouse building for our 75% owned subsidiary MRG 
    Systems Ltd for GBP489,000 (including stamp duty). 
 
  * Bentalls Complex, Colchester Road, Heybridge, Maldon, Essex. In August 
    2011, we purchased via a sale and lease back this 200,000 sq ft freehold 
    industrial building set on 8.5 acres for GBP3,900,000 (including stamp duty). 
    The property is let for 10 years to Wyndeham Group Ltd for GBP500,000 per 
    annum, with a one year rent free period. 
 
  * Lyceum Building, Bold Street, Liverpool. In August 2011, we completed the 
    acquisition of this prime, iconic listed building let to the Post Office 
    with 3.5 years remaining on their lease. The rent reserved is GBP500,000 per 
    annum. The tenant is not in occupation but has sublet part of the building 
    to the Co-operative Building Society. The purchase price was GBP2,964,000 
    (including stamp duty). 
 
  * 34 Marine Terrace, Margate, Kent. This freehold property was purchased in 
    August 2011 for GBP190,000 (including stamp duty). The property has food use 
    and is let for GBP21,000 a year. 
 
General trading update 
 
The Group has been very busy organising its refinancing and evaluating likely 
property investments in the first half of the year, which created a backlog of 
properties that were mainly completed in July and August 2011 (as described 
above). We now have a good base for rental income of GBP10.5 million going 
forward (even though GBP1.2 million of this is subject to rent free periods of 
between one and two years), this is compared to annual rents of GBP7.7 million 
reported in the prior year, to cover the larger loan with its increased costs 
as well as fund future investment. 
 
Of our new financing package of GBP75 million, following the above acquisitions, 
we have an undrawn revolving facility of GBP15 million. This element of our 
financing is un-hedged and whilst rates remain low, if this can be invested in 
high yielding properties, it provides the opportunity to obtain healthy margins 
above our borrowing costs. 
 
As ever we remain upbeat about Panther's future prospects. 
 
I believe that a long term investment in property has always protected the 
holder against inflation and I see no reason why despite the present economic 
uncertainty it will not remain so. 
 
Other than as stated above, there has been no significant change in the Group's 
financial position since 30 June 2011. 
 
Andrew Perloff 
 
Chairman 
 
For further information contact: 
 
Panther Securities PLC                                            01707 667 300 
 
Andrew Perloff - Chairman 
 
Simon Peters - Finance Director 
 
 
 
END 
 

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