Urban Exposure plc: COVID-19 and Trading Update, Notice of FY 2019 Results

17 April 2020

THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION AS DEFINED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014

Urban Exposure Plc

COVID-19 and Trading Update

Notice of FY 2019 Results

Urban Exposure plc (the "Company" or "Urban Exposure"), a specialist  development finance firm and asset manager, today announces an update on the impact of COVID-19 on the Company and the release date for its results for the year ended 31 December 2019 (FY 2019).

COVID-19 and response

The welfare of our colleagues, clients and partners has been our priority since the outbreak of the COVID-19 pandemic. We have been in close communication with our client base in connection with their response to the advice of Government and health authorities to help prevent the spread of the virus, in particular in respect of Health & Safety measures on construction sites. 

The Company continues to operate with its business continuity plan in place. Our workforce is now working remotely from home with the same functionality they would have in the office. Inevitably the business will be impacted by COVID-19 and the issues that it is causing across the real estate market, and beyond in the wider economy. Along with many other businesses, the Company has taken action to reduce costs and manage its cash flow to ensure the Company is well prepared for any possible further disruption from the impact of COVID-19. Specifically, the Company has:

In response to the COVID-19 pandemic, the Company has conducted a thorough review of its existing and future loan pipeline, and will focus efforts in the immediate future on its existing loan portfolio.

We are communicating with borrowers on a weekly basis, and actively managing issues that may arise, providing support and advice as appropriate regarding any impact of the pandemic on individual construction sites.  

The Company has conducted a comprehensive review of all loan facilities, insurances and contracts, and has conducted a detailed stress test of the loan portfolio. Due to the Company's conservative LTGDV position the Company believes that the loan portfolio remains robust in the face of the unprecedented market conditions. Furthermore, our funding facilities and joint ventures remain in place, and we are working closely with our funding partners to continue to assess and mitigate any risks that may arise in the future

FY 2019 Results

The Company will publish its audited financial results for the year to 31 December 2019 on 28 May 2020. On an unaudited basis the Company achieved a small profit before tax for the period of £0.2m on the basis of:

The unaudited Tangible Net Asset Value (TNAV) of the Company for the Period was £133.0m, representing 83.9 pence per share.

Dividend

Given the nature of the current COVID-19 pandemic and the market uncertainty it has created, the Board will not proceed with payment of the final instalment of the proposed 2019 dividend being 3.33 pence per share and £5.3m in aggregate.  The Board will review the Company's dividend policy for 2020 later in the year.

Strategic review, alternative proposals and guidance

In addition to the impact of COVID-19, the Company is reviewing its strategic options going forward,  including making further adjustments to its business model from a costs perspective as well as reviewing all possible options to maximise shareholder value.

The Company has received a number of enquiries following its announcements regarding the non-completion of the agreed transaction with Honeycomb Holdings Limited in respect of the potential sale of its loan book. The Company intends to consider all credible proposals which may be forthcoming, but there can be no guarantee that any proposals would lead to a satisfactory deal, particularly given current market conditions.  As announced previously, the Company is pursuing its claim against Honeycomb Holdings Limited and connected entities in respect of the breach of the agreement for the sale of Urban Exposure Lendco Limited.

Naturally the current environment and probable reduction in new lending will have an impact on the Company's performance for the current financial year. Given the unprecedented nature of the COVID-19 situation, which is likely to remain uncertain for some time, the Company is suspending its FY 2020 guidance. A further update on 2020 will be provided when the Company announces its FY 2019 results.

Enquiries:

Urban Exposure plc        Tel: +44(0)207 408 0022

William McKee, Chairman

Randeesh Sandhu, Chief Executive Officer

Sam Dobbyn, Chief Financial Officer

Jefferies (Financial adviser and Joint Corporate Broker)  Tel: +44(0)20 7029 8000

Rishi Bhuchar

Ed Matthews

James Thomlinson

William Brown

Liberum (NOMAD and Joint Corporate Broker)   Tel: +44(0)203 100 2000

Neil Patel

Gillian Martin

Jonathan Wilkes-Green

Louis Davies

MHP Communications (Financial Public Relations)  

Charlie Barker

Sophia Samaras

Tel: +44(0)203 128 8540 / +44(0)203 128 8731

[email protected]