19th Jan 2021 14:30
(Alliance News) - U&I Group PLC on Tuesday set itself a 100-day deadline for a strategic review led by a new chief executive that will look ways to simplify and refocus the business toward more predictable income streams.
The review and executive changes came as the London-based property regeneration developer and investor reported a wider pretax loss in half year ended September 30 and skipped paying an interim dividend.
U&I said its pretax loss widened to GBP50.2 million in the recent half from GBP23.9 million a year before, amid development and trading losses of GBP25.0 million, compared to similar such gains of GBP3.6 million previously.
In response, U&I launched a cost-cutting drive, saying recurring annual overheads will be cut by 25% to GBP16 million by the end of financial 2021 from GBP21.2 million in financial 2020. This will include a 41% reduction in staff by the end of June.
Basic net asset value dropped 26% to GBP240.5 million on September 30 from GBP327.0 million a year before, reducing NAV per share to 193 pence from 263 pence.
U&I shares were down 7.8% at 67.30p on Tuesday afternoon in London, the stock down 63% over the past 12 months.
U&I suspended payment of an interim dividend, compared to 2.4p a year ago. A decision on a final dividend will be made at the time of its full-year results, U&I said, adding it will review dividend policy to align with its strategic review of the business.
Matthew Weiner stepped down as chief executive officer on Tuesday, and Chief Development Officer Richard Upton was promoted to CEO in his place. Chief Financial & Operating Officer Marcus Shepherd will depart after completing the results for the financial year ending March 31.
Chair Peter Williams will remain in post but launch a review of the board's optimal structure.
The results of both reviews were promised by May 26, when U&I will publish its annual results.
"The last six months has been an incredibly challenging period for the company as we, alongside the real estate sector, have been dealing with the impacts of the wider health crisis and consequent economic uncertainty," said new CEO Upton.
"We have taken difficult decisions to exit legacy and non-core assets, improving liquidity and reducing leverage significantly. This activity has been undertaken at pace, paving the way for a strong, clean platform for growth," he added.
U&I said it will aim to weight future business toward more predictable income streams from land enablement, development profits and recurring development management fees.
By Tom Waite; [email protected]
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