18th Feb 2008 07:00
Wichford plc18 February 2008 Wichford P.L.C. ("Wichford" or the "Company") Interim Management Report for the 3 months to 31 December 2007 18th February 2008 "Wichford has continued to make good progress in achieving its strategic goalsto build up its portfolio of high quality UK and Continental Europeanproperties, and to increase the proportion of its rental income which is indexlinked. The Company's shares were admitted to the Official List of the London StockExchange on 28 December 2007 As previously announced, the Company increased its shareholding in theJustizzentrum in Halle, Germany to almost 95%, in line with the initial contractsigned in 2007 , and announced the disposal of one asset being Archway Tower,Islington for a cash consideration £11,040,000. The disposal produced ahealthy profit over the original cost of £10,175,000 and over the valuation inMarch 2007 of £9,500,000. The UK Portfolio In the quarter ended 30th December 2007, the property market in the UK hasexperienced a softening of yields which has had some impact on the Wichfordportfolio. However, the Company benefits from high-quality earnings resultingfrom very high occupancy levels, the quality of its tenants and the length ofthe leases on the properties. At 30th September 2007, the U.K portfolio was independently valued by AtisrealLtd at £516,795,000, reflecting a net initial yield of 6.08% on the Coreportfolio and 7.01% on the Active portfolio. As at 31st December 2007, the Directors believe that these yields would be 6.4%and 7.3% respectively. The Continental European Portfolio The markets in Continental Europe in which Wichford operates, namely Germany,France and the Netherlands have been stable with domestic and internationalinvestors still looking for suitable investments. As at 30th September 2007, DTZ, Savills and Jones Lang Lasalle, valued theEuropean properties at an initial yield of 5.22% per annum and the Directorsbelieve that, as at the end of December 2007, there has been little change. The Company continues to look selectively for acquisitions in Continental Europewith a particular focus on France and the Netherlands. Finance The Board adopts a funding strategy which seeks to minimise the impact ofinterest rate variations by the use of swaps, the use of which providesstability to the Company's net income. Under IFRS these instruments are marked to prevailing market rates. At 30thSeptember 2007, the mark to market value of the Group's swap arrangements, whichwas £15m, at that date, has declined. As at 31st December 2007, the swaps werevalued at £1.65m. Both the adjustment to the property portfolio and the mark to market of theswaps are non-cash items. The average rate of the swaps in place during theperiod were lower than prevailing interest rates, thus saving the Companyconsiderable amounts of cash and has resulted in a lower exposure to interestrate fluctuations. Dividend The final dividend of 6.2 pence per share for the year to 30 September 2007 willbe paid on 18 February 2008. The ordinary shares have traded on an ex-dividendbasis since 9 February 2008. Outlook The Board believes that the UK, the increase in initial yields and reduction inmedium term interest rates now offers new interesting opportunities particularlythe Active (short lease) portfolio. It will also continue look for suitableproperties in France and the Netherlands. The Group is negotiating anadditional debt facility which will give it capacity to grow its investmentportfolio. As previously announced the drive to increase the indexation of the rents willcontinue. This in turn will give more visibility to the future growth ofdividends." Philippe de Nicolay. Non-executive Chairman Isle of Man Enquiries: Wichford P.L.C. Philippe de Nicolay 00 33 1 40 74 42 79 Ita McArdle 01624 690300 Wichford Property Management Limited Jamie Hambro 020 7747 5678 Richard Britten-Long 020 7016 6150 Philip Cooper 020 7495 7111 Citigate Dewe Rogerson 020 7638 9571 George Cazenove Hannah Seward Notes to editors Wichford P.L.C. (UK Listed:WICH) is a property investment company, with aportfolio focused on investment property occupied exclusively by Central andState Government bodies. Approximately a quarter of the portfolio comprisespublic sector rented properties in Germany, the Netherlands and France. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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