Your Space PLC
27 March 2008
Your Space plc ('Your Space' or 'the Company')
27 March 2008
Trading Update and Bonus Issue of Shares
• Following agreement at the Annual General Meeting in January 2008
shareholders will receive a bonus issue of 1 share for every 14 shares held
which is worth approximately 6.7p a share.
• Your Space has developed into 3 distinct businesses within the Group
1) Your Space Solutions Division which undertakes specialist restoration
contract work for third parties as well as the serviced office business.
2) Your Space Service Office Division which also incorporates conference
and catering services as a Branded National operation.
3) The newly formed Virtual Office Division which offers the UK's first
free virtual office and teleco services business.
• 3 new serviced office centres secured since January all situated in prime
city centre locations in Newcastle-upon-Tyne, Manchester and Leicester
taking the total number of centres to 11.
• The newly formed Your Space Solutions Division has secured a combined
value of £4.5m to carry out both the specialist restoration work at these
centres whilst at the same time enjoy the income streams given the rent free
• The Solutions Division is also in negotiations to secure other contracts
for its Service Office Division around the UK.
• The restructuring of the Your Space Group has now evolved into an almost
complete services business.
In December 2007, the Company announced that the Board was considering issuing
additional shares to existing shareholders by way of a scrip dividend and/or a
capitalisation of profits or share premium account based on 6.5p of additional
shares for each existing share held. Shareholders were therefore asked to pass
on ordinary resolution at the Company's Annual General Meeting which authorised
the Directors to exercise their powers under the Company's articles of
association in relation to scrip dividends and the capitalisation of profits and
share premium account. Such resolution was duly passed at the Company's Annual
General Meeting held on 28 January 2008.
It therefore gives me great pleasure to announce the Board resolved to exercise
the authority granted to it at the AGM and agreed to proceed with a bonus issue
of an additional 1,443,669 Ordinary Shares of 10p each in the capital of the
Company by way of a capitalisation of part of the Company's share premium
account, such bonus issue to be for the benefit of the Company's registered
shareholders as at 28 March 2008. Accordingly, each shareholder is entitled to
receive 1 Bonus Share for every 14 Ordinary Shares of 10p each in the capital of
the Company which were held by shareholders on the Record Date, to be issued on
the 31 March 2008. Application to trading has been made and as such, It is
expected dealings in the new shares will commence on the 31 March 2008.
The directors have also determined that, to the extent any shareholder becomes
entitled to a fraction of a Bonus Share, such fractional entitlements shall be
rounded down and, therefore, the number of Bonus Shares being issued (and the
amount of share premium account being capitalised) be reduced accordingly.
Subject to any such rounding down, following the bonus issue, the Company will
have a total of 21,655,037 Ordinary Shares of 10p each in issue.
Chief Executive's update
The current turmoil in the financial market is presenting us with numerous
opportunities to enjoy the commercial use of prime location buildings with
relatively low cash contributions from Your Space plc
As disclosed in our interim statement in December we are in the process of
negotiating further additional sites throughout the regions of the UK to our
portfolio. I am pleased to confirm that we have added a further 3 centres, being
a 26,000sq ft Grade II listed building in the centre of Newcastle upon Tyne, a
37,000 sq ft building with underground car parking in the centre of Manchester
and a 35,000sq ft Grade II listed building in the heart of Leicester. This
takes our total number of centres around the UK to 11 in total. We are also in
discussions to add yet further sites as we expand the Your Space model and
Our recently formed Your Space Solution Division provides an ideal opportunity
for Institutions and landlords alike to unlock value in their buildings and at
the same time enable us to expand our model in carefully located cities/regions
around the UK. As a result we are pleased to announce we have secured the
Newcastle site which is in a prime location for a zero cash contribution; we
have also conditionally secured the Manchester site along similar terms. We will
benefit from a combined consideration of over £4.2m to carry out both the
specialist restoration work at these centres whilst at the same time enjoy the
income streams given the rent free periods we have negotiated.
We are currently enjoying headline rates of over £55 per square foot at our New
Mount Street centre in Manchester which is considered an off prime pitch site
and therefore with the demand for our product and the location of these new
centres at Newcastle and Manchester, we expect a substantial increase from this
headline rate whilst at the same time will benefit from the rent free periods we
have secured in the short term. We will also enjoy conference and catering
service revenue alongside car-park rental and secretarial services at these
The key to unlocking the value for the owners of these buildings and to make it
commercially viable is that Your Space owns its own restoration division within
the group. This is a highly specialist service and over the past 18 months we
have built up a good reputation for carrying out difficult works to listed
buildings by managing the complete process from planning, design, configuration
of space, procurement and delivery of the final product. Your Space can carry
out the work profitably but offering a saving to the landlord who then has the
benefit of our serviced office division taking a long term lease on the
building. The advantage to both parties is that Your space has a commercial use
of the building once the restoration works have been completed, the landlord has
a quality tenant and has unlocked value in the building particularly as our
Solutions division will ensure the work is of a high standard as we are taking
possessions & operating as a serviced office.
As mentioned earlier we are also in negotiations with various landlords across
the regions of the UK to consider partnerships similar to the two described
above. With the over supply of apartments in many areas of the UK, landlords
who own vacant/part vacant Grade I or Grade II listed buildings have a decision
on how best to utilise this space. The cost to restore these buildings can at
times be difficult especially if you don't have the inherent skills. Your Space
offers a fixed price contract on a sq. ft. basis and a turnkey solution. The
landlord benefits from knowing his costs upfront without the worry of time
delays and cost overruns. It is also in our interest to deliver a quality
product as fast as we can using our in house team to take advantage of the
market and the rent free period we have secured. Thus Your Space brings these
fine character period buildings back to life by creating a boutique style
environment for our clients in prime located city centres across the UK. We also
invest in the latest state of the art IT/Teleco hardware for our clients to
benefit from in this 21st century.
In addition we have agreed a conditional exchange to purchase a substantial
35,000sq/ft Freehold Grade II listed character building in the centre of
Leicester. The site is being acquired from the local city council and is
opposite the local law courts and just minutes from the main shopping area and
town hall. Whilst we were not the highest bid our offering and product was taken
into consideration. We believe we will have acquired a fantastic building with
many features to promote our brand of a 5 star operation within Leicester and
the price being paid for this freehold building with its prime location offers
substantial value for money for Your Space.
I am pleased to announce also that in conjunction with our partners Cisco
Systems and carrier NTL, Your Space is the only National serviced operator
offering free inclusive telephone calls for our clients. With the location of
our business hubs being developed in prime city locations the Your Space product
will have a unique selling point.
Another exciting advancement to our product range is the Virtual Office service,
which we expect to go live in April. For the past 18 months we have been working
on a concept to offer virtual office and PA services for free. This product will
again be unique in the UK and we believe will be in high demand. There are 1000s
of businesses throughout the UK currently using virtual services but pay a
monthly fee for the basic service and then pay for the cost of the diverted
telephone call. As such the business cannot budget for its end monthly bill.
Your Space Virtual Office takes away that uncertainty as we will offer the
package totally free. This has been made possible in conjunction with NTL and
Cisco systems. As part of this service all the virtual client's business mail
will be directed to one of the chosen business centres which must be picked up
within 2 days otherwise it is posted to them for a charge. We can also offer up
to 1 hours free conference space per month dependant on availability to each
virtual client at their designated centre of choice. For this free service this
centre becomes their registered office.
Your Space will benefit from a substantial database plus derive further revenue
from handling the mail and forwarding this to their home address if it is not
collected. It is this margin on the mail handling which provides us with the
opportunity to drive further revenue income plus we will of course enjoy an
increased income stream from the additional conference and catering sales we
expect from these clients.
We have spent a considerable level of time and research developing this product.
Our target is to generate just £6 per week on mail services income from each
client. However with the expectant high volume of users and with using the
latest technology installed in conjunction with our long term Partners NTL &
Cisco we have been able to keep our costs to a minimum. It is worth noting that
the current market price for this service ranges from £55 to £125 per month
outside London and can be as high as £250 per month in inner London before the
added cost of the phone call. We offer all of this for free. We also see a
further benefit that these virtual clients will eventually take space from us at
one of our centres as and when they expand their business.
I am also pleased to confirm our serviced office business is performing very
well as demand for our product increases. We are adding more clients month on
month and increasing our revenue at each of our existing centres. We have also
improved on our existing portfolio, for instance at New Mount Street we have
created 7500 sq. ft. of new contemporary office space in the lower ground floor
including a VIP lounge and high quality fixtures and fittings. This area is
already attracting some good quality clients. The Bridge at Clerkenwell is also
undergoing a facelift that will not only improve the day to day working
environment for existing tenants but will also provide 7 stunning new offices of
superior specification that will benefit from natural light and modern design.
The project will also provide 3 new meeting rooms with all the associated
services you'd expect from a five-star office.
In the last two years we have built a distinct business model that we are
expanding throughout the UK. With our partnerships with Cisco Systems, NTL and
Costa coffee plus our expertise in carrying out specialist restoration work in
listed buildings to create a boutique style environment we are well positioned
to expand the model.
We can increase our portfolio into cities across the UK at a faster rate
generating profits from the restoration business and the serviced office
operation as we also enjoy rent free periods whilst we fill the space within
these centres. Both areas are contributing to the group. We see this latest
development of our business model more attractive to us in this climate thus
avoiding the necessity to enter into negotiations to take on freeholds and the
delays this entails in unlocking value via the sale & leaseback route. We also
avoid paying additional financing costs to purchase these property which in
today's uncertain markets placing a unnecessary risk on the business. However
should opportunities present themselves we will still consider freehold
purchases in distressed/substantial value for money circumstances.
To conclude these are exciting times for your space plc and everyone associated
with it especially as we see businesses now starting to wake up to the service
office market and understanding the benefits of taking flexible quality space.
For further information please contact:-
Steve Turton, Director, Your Space plc 0161 953 4000
Sue Lace, Company Secretary, Your Space plc 0161 953 4000
Richard Hughes / Bobby Fletcher, Zeus Capital 0161 831 1512
This information is provided by RNS
The company news service from the London Stock Exchange