Interim Management Statement
November 13 2009 - 2:00AM
UK Regulatory
TIDMRUGB TIDMTCF
RNS Number : 4493C
Rugby Estates Investment Trust PLC
13 November 2009
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| NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, 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. |
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| PRESS ANNOUNCEMENT |
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| EMBARGOED UNTIL 7.00AM |
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| 13 NOVEMBER 2009 |
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| RUGBY ESTATES INVESTMENT TRUST PLC ("REIT" OR THE "COMPANY") |
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| INTERIM MANAGEMENT STATEMENT |
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| Since the announcement of our interim results on 27 August 2009, market |
| conditions in the property investment sector have shown significant |
| improvement, offering the prospect once again of capital value and income |
| growth. |
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| REIT's portfolio is usually valued externally every six months. As |
| previously reported, the Company's property portfolio was valued at |
| GBP57.1 million as at 30 June 2009 and net assets at that date were |
| GBP35.3 million, representing a net asset value of 60p per share. |
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| However, as Shareholders will be aware, on 13 October 2009, Terra |
| Investments Limited ("Terra"), a vehicle backed by Laxey Partners Limited, |
| announced an unsolicited mandatory rule 9 offer to acquire the Company for |
| 41p in cash for each REIT Share (the "Offer"). In response to the Offer |
| from Terra, the Board has commissioned an external valuation of the |
| Company's property portfolio by CBRE as at 31 October 2009. This values |
| REIT's property portfolio at GBP63.5 million, which represents a 12.6 per |
| cent. increase (on a like-for-like basis) on the valuation as at 30 June |
| 2009. Adjusting the balance sheet as at 30 June 2009 for CBRE's external |
| valuation as at 31 October 2009 and the two asset disposals that have |
| occurred since 30 June 2009 (in relation to which further details are set |
| out below), REIT's NAV has increased to 72p per share on a pro forma |
| basis. |
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| This valuation increase has been driven by successful asset management |
| initiatives undertaken by Rugby Asset Management Limited on behalf of the |
| Company and improving investor sentiment in turn leading to an increase in |
| valuations across the market. |
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| Successful asset management initiatives since 30 June 2009 include: |
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| - | eight new leases have been completed (either lettings or lease |
| | renewals) securing approximately GBP106,000 per annum of additional |
| | contracted rental income at rent levels which are broadly in line with |
| | CBRE's ERV; |
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| - | four rent reviews have been documented achieving, in aggregate a 25 |
| | per cent. uplift in passing rents, at levels broadly in line with |
| | CBRE's ERV; |
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| - | six additional new leases are in solicitors' hands (either lettings or |
| | renewals) which, if legally contracted, would increase rental income |
| | by approximately GBP360,000 per annum; |
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| - | on signing the leases above, REIT's void rate would decrease to |
| | approximately 8 per cent. (from approximately 14 per cent. as at 31 |
| | October 2009) compared with the IPD void rate (as at 30 September |
| | 2009) of approximately 12 per cent.; and |
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| - | Borehamwood and a unit in Lancing have been sold for, in aggregate |
| | GBP663,000, more than 60 per cent. above their combined valuation as |
| | at the last year end. |
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| As previously announced, on 24 August 2009, the bank loan facility with |
| Royal Bank of Scotland was restructured to provide a new, increased |
| facility on more flexible terms. The facility has been increased by GBP7 |
| million to GBP23.5 million, which will allow REIT if necessary to finance |
| redemptions of all outstanding non-guaranteed loan notes whilst also |
| creating additional working capital headroom. Since 30 June 2009, the |
| Company has repaid GBP2.5 million of loan notes. Blocked deposit accounts |
| were used to repay GBP0.4 million of guaranteed loan notes and GBP2.1 |
| million were repaid by way of an increase in the bank loan. |
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| Commenting, Philip Kendall, Non-Executive Chairman of REIT, said: |
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| "We are very pleased with the good progress the Company has made since 30 |
| June 2009, having undertaken a number of active asset management |
| initiatives and improved REIT's financing capacity through the |
| renegotiation of its banking terms. These measures, combined with the |
| inherent characteristics of the portfolio and improving sentiment for real |
| estate, have translated into a significant increase in the Company's |
| valuation. |
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| "The Company has today published a document setting out in full, the |
| reasons why the Board believes Terra's Offer substantially undervalues the |
| Company and thus why the Board has recommended strongly that shareholders |
| reject Terra's Offer." |
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| Enquiries: |
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| Rugby Asset Management | 020 7016 0050 |
| David Tye | |
| Andrew Wilson | |
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| Rugby Estates Investment Trust Plc | 07710 060714 |
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| Philip Kendall (Non-Executive | |
| Chairman) | |
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| | |
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| Hawkpoint Partners Limited | 020 7665 4500 |
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| Ben Mingay | |
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| Edward Arkus | |
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| Collins Stewart Europe Limited | 020 7523 8350 |
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| Hugh Field | |
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| Bruce Garrow | |
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| Financial Dynamics | 020 7831 3113 |
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| Stephanie Highett | |
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| Dido Laurimore | |
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| Laurence Jones | |
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| A copy of this announcement will be available on the website of the Company |
| at http://www.rugbyreit.co.uk/. |
| The directors of the Company accept responsibility for the information |
| contained in this announcement. To the best of the knowledge and belief of |
| the directors of the Company (who have taken all reasonable care to ensure |
| such is the case) the information contained in this announcement is in |
| accordance with the facts and does not omit anything likely to affect the |
| import of such information. |
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| Hawkpoint Partners Limited, which is authorised and regulated in the United |
| Kingdom by the Financial Services Authority, is acting for REIT and no-one |
| else in connection with the Offer and will not be responsible to anyone |
| other than REIT for providing the protections afforded to clients of |
| Hawkpoint Partners Limited or for giving advice in relation to the Offer. |
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| Collins Stewart Europe Limited, which is authorised and regulated in the |
| United Kingdom by the Financial Services Authority, is acting for REIT and |
| no-one else in connection with the Offer and will not be responsible to |
| anyone other than REIT for providing the protections afforded to clients of |
| Collins Stewart Europe Limited or for giving advice in relation to the |
| Offer. |
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| Forward Looking Statements |
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| This announcement may contain certain "forward looking statements". By |
| their nature, forward looking statements involve risk and uncertainty |
| because they relate to future events and circumstances. Actual outcomes and |
| results may differ materially from any outcomes or results expressed or |
| implied by such forward looking statements. Any forward looking statements |
| made by or on behalf of REIT speak only as of the date they are made and no |
| representation or warranty is given in relation to them, including as to |
| their completeness or accuracy or the basis on which they were prepared. |
| REIT does not undertake to update forward looking statements to reflect any |
| changes in REIT's expectations with regard thereto or any changes in |
| events, conditions or circumstances on which any such statement is based. |
| Information contained in this announcement relating to REIT should not be |
| relied upon as an indicator of future performance. |
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| Dealing Disclosure Requirements |
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| Under the provisions of Rule 8.3 of the Takeover Code, if any person is, or |
| becomes, "interested" (directly or indirectly) in 1% or more of any class |
| of "relevant securities" of REIT, all "dealings" in any "relevant |
| securities" of that company (including by means of an option in respect of, |
| or a derivative referenced to, any such "relevant securities") must be |
| publicly disclosed by no later than 3.30 p.m. (London time) on the London |
| business day following the date of the relevant transaction. This |
| requirement will continue until the date on which the offer becomes, or is |
| declared, unconditional as to acceptances, lapses or is otherwise withdrawn |
| or on which the "offer period" otherwise ends. If two or more persons act |
| together pursuant to an agreement or understanding, whether formal or |
| informal, to acquire an "interest" in "relevant securities" of REIT, they |
| will be deemed to be a single person for the purpose of Rule 8.3. |
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| Under the provisions of Rule 8.1 of the Takeover Code, all "dealings" in |
| "relevant securities" of REIT by Terra Investments Limited or by REIT, or |
| by any of their respective "associates", must be disclosed by no later than |
| 12.00 noon (London time) on the London business day following the date of |
| the relevant transaction. |
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| A disclosure table, giving details of the companies in whose "relevant |
| securities" "dealings" should be disclosed, and the number of such |
| securities in issue, can be found on the Takeover Panel's website at |
| www.thetakeoverpanel.org.uk. |
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| "Interests in securities" arise, in summary, when a person has long |
| economic exposure, whether conditional or absolute, to changes in the price |
| of securities. In particular, a person will be treated as having an |
| "interest" by virtue of the ownership or control of securities, or by |
| virtue of any option in respect of, or derivative referenced to, |
| securities. |
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| Terms in quotation marks are defined in the Takeover Code, which can also |
| be found on the Panel's website. If you are in any doubt as to whether or |
| not you are required to disclose a "dealing" under Rule 8, you should |
| consult the Panel. |
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This information is provided by RNS
The company news service from the London Stock Exchange
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