Interim Management Statement

RNS Number : 5154D

Alpha Pyrenees Trust Limited

17 May 2012

 



17 May 2012

Alpha Pyrenees Trust Limited (the "Trust"or the "Company")

Interim Management Statement

Alpha Pyrenees Trust Limited today publishes its interim management statement for the quarter ending 31 March 2012 and the period up until the date of this announcement. The information contained herein has not been audited.

KEY POINTS

·      NEW LEASES AND LEASE EXTENSIONS COVERING APPROXIMATELY 36,975 SQUARE METRES (14% OF THE TRUST'S PORTFOLIO BY AREA) ACHIEVED SINCE 1 JANUARY 2012

·      WEIGHTED AVERAGE LEASE LENGTH IS 8.8 YEARS TO EXPIRY AND 4.8 YEARS TO NEXT BREAK

·      LEASES ARE SUBJECT TO ANNUAL INDEXATION; INDEXATION HAS SHOWN STRONG GROWTH IN FRANCE IN RECENT QUARTERS

·      91% OF THE TRUST'S PORTFOLIO BY VALUE IS IN FRANCE

·      83% OF PORTFOLIO INCOME COMES FROM GRADE A TENANTS

·      PORTFOLIO VALUE INCREASED BY 0.4% IN THE QUARTER TO 31 MARCH 2012 PROVIDING CURRENT PORTFOLIO VALUATION YIELD OF 8.2%

·      ADJUSTED NAV* 37.7 PENCE PER SHARE AS AT 31 MARCH 2012 (31 DECEMBER 2011: 37.0 PENCE PER SHARE)

·      DIVIDEND OF 0.6 PENCE PER SHARE DECLARED FOR THE FIRST QUARTER 2012

·      99% OF BORROWINGS FIXED AT A WEIGHTED AVERAGE INTEREST RATE OF 5.26% PER ANNUM TO MATURITY IN FEBRUARY 2015

DIVIDEND

The Board is declaring a dividend of 0.6 pence per share for the first quarter of 2012 (previously 0.9 pence per share). The dividend will be paid on 18 June 2012, with an associated ex-dividend date of 23 May 2012 and record date of 25 May 2012. No scrip alternative will be offered for this dividend.

The Trust's policy is to broadly align the dividend with adjusted earnings and monitor the level of dividend each quarter, so as to maximise the Trust's ability to take advantage of value-add opportunities including income-enhancing investment opportunities in its property portfolio.

REVALUATION AND NET ASSET VALUE ("NAV")

The Trust's investment portfolio was valued at £254.7m (€305.4m) on 31 March 2012 giving an average valuation yield across the portfolio of 8.2% (French portfolio 8.2% and Spanish portfolio 8.5%). On a Euro like-for-like basis the French portfolio increased in value by 0.6% and the Spanish portfolio decreased in value by 1.2% from 31 December 2012 giving an overall increase in valuation of 0.4% for the quarter.

As at 31 March 2012 the adjusted NAV* is 37.7p per share. The increase in adjusted NAV from 31 December 2012 (37.0p per share) is due mainly to net movements on revaluation.

*Adjusted NAV - unaudited, after adjustments for the unrealised mark-to-market of the interest component of the currency swap, interest rate swap derivatives and deferred taxation provisions.

REVALUATION FREQUENCY

Since the third quarter of 2007, the Trust has provided quarterly property valuation information through its annual report, half year report and interim management statements. In light of the growing market practice for property companies to provide semi-annual property valuations and the cost savings that will be achieved for the Trust, the Board has decided that the Trust will move to semi-annual valuations following the valuation to be conducted for the half year report for the period to 30 June 2012. The Trust will continue to provide interim management statements for the first and third quarters.

FINANCING

The Trust's total borrowings of £202.7m (€243.0m) and portfolio value of £254.7m (€305.4m) gives a net leverage after cash of 74.2% as at 31 March 2012.

All borrowings are long term, with maturity in February 2015 and 99% of borrowings have interest rates that are fixed to maturity at a weighted average rate of 5.26% per annum. There are no Loan to Value ("LTV") covenant tests until February 2014, at which point the Trust's LTV should not exceed 87.5% on a country portfolio basis. The French (€221.1m) and Spanish (€21.9m) borrowings are independent and are not cross-collateralised.

PROPERTY UPDATE

The Trust's Investment Manager has continued to concentrate on active asset management and property management initiatives, including investment within the portfolio, to secure the Trust's income and we are pleased to report a number of important achievements in new lettings. In addition to the new leases to Quadralog at Evreux and Jacquotte at Goussainville totalling 11,440 square metres that were detailed in the annual report, further new leases and lease extensions covering approximately 25,535 square metres (10% of the Trust's portfolio by area) have been completed since 1 January 2012. The portfolio has an overall level of average occupancy of 87%, measured by rental income as a percentage of potential total income. The effective weighted average lease length of the Trust's portfolio is 8.8 years to expiry and 4.8 years to the next break with 83% of the Trust's portfolio income coming from Grade A tenants.

FRANCE

Athis Mons - Furnotel has signed a new 6/9 year lease from August 2012 on two logistics units and all the office accommodation totaling 11,380 square metres. The Trust is investing in some upgrading works, particularly to the offices, and Furnotel is carrying out extensive works to create a bespoke workshop area as they will use the premises as their headquarters. Sofactory has signed a new 3/6/9 year lease from April 2012 on one logistics unit of 6,800 square metres and has an option until September to lease the remaining unit of 5,100 square metres, which is currently being actively marketed to third parties. The entire property was previously leased to Point P whose lease was due to end in November 2012. To accommodate the timing needs of the new tenants at the property and to minimize downtime between leases, an early termination of the lease was negotiated with Point P in return for an indemnity payment.

Aubergenville - Etanco has signed a new 9 year lease with a fixed period of 3 years from March 2012 and annual renewals thereafter on a logistics unit of 6,395 square metres that was vacated at the previous lease end date of January 2012.

Vitry - Go Sport has extended its lease until September 2015 on a 370 square metre light industrial unit.

SPAIN

Córdoba - Vision Lab has extended its lease on a 200 square metre retail unit until July 2014 and El Meson de Buen Comer extended its lease on a 210 square metre restaurant unit until March 2013.

Ecija and Alcala - four local tenants extended their leases for one year periods on units totalling 180 square metres.

RENTAL INDEXATION

The INSEE Construction Cost Index ("ICC"), applicable to leases in France, has shown annualised growth for the last eight published quarters and the annual indexation base as at Q4 2011, the latest published, stood at 6.85% following an annual growth rate of 6.84% as at Q3 2011.

The Spanish Consumer Price Index, applicable to leases in Spain, was running at an annualised rate of increase of 2.0% as at the end of April 2012.

For further information:

Dick Kingston, Chairman, Alpha Pyrenees Trust Limited                           01481 735 541

Paul Cable, Fund Manager, Alpha Real Capital LLP                                  020 7268 0300

For more information on the Company, please visit www.alphapyreneestrust.com.

FORWARD-LOOKING STATEMENTS

This interim management statement contains forward-looking statements which are inherently subject

to risks and uncertainties because they relate to events and depend upon circumstances that will

occur in the future. There are a number of factors that could cause actual results to differ materially

from those expressed or implied by such forward-looking statements. Forward-looking statements are

based on the Board's current view and information known to them at the date of this statement. The

Board does not make any undertaking to update or revise any forward-looking statements, whether as

a result of new information, future events or otherwise. Nothing in this interim management statement

should be construed as a profit forecast.

 

END

 

 

IMSGGUGPAUPPGQQ