Final results for the year ended 30 June 2024

October2024

Town Centre Securities PLC today (16 October 2024) announces its audited final results for the year ended 30 June 2024.

Financial performance

Net assetsresilient relative performance:
o Like for like portfolio valuation down 4.7% from June 2023:
• outperformance versus the MSCI/IPD All Property Capital Index which fell by 4.5% over the period
• reduction primarily due to real estate investor and market sentiment around the macro-economic outlook adversely impacting valuation yields
o Statutory net assets of £119.6m or 284p per share (FY23: £141.1m, 291p). EPRA net tangible assets (‘NTA’)$ measure at £116.7m or 277p per share (FY23 equivalent: £137.7m, 284p)
Statutory resultsreduced loss before tax:
o Statutory loss before tax of £8.0m (FY23: loss of £29.5m) and statutory loss per share of 17.9p (FY23: earnings of 60.1p) due to valuation reduction
EPRA resultsimprovement in underlying earnings, also benefited from a tax credit of £1.7m in the year:
o EPRA earnings* before tax of £3.8m (FY23: £3.1m)
o EPRA earnings per share before tax* of 8.5p (FY23: 6.2p)
Loan to valueincreased in the period by 500bps to 50.8% following successful tender offer and reduction in portfolio value:
o Total net borrowings of £137.2m (FY23: £129.9m) including £82.4m debenture
Shareholder returnsenhanced by tender offer:
o As previously announced, no proposed final dividend, but significant interim dividends due to REIT requirements paid making the total dividend for the year of 8.5p (FY23: 5.0p)
o NAV enhancing tender offer in the first half of the year (6,292,920 shares bought back in total) following on 4,075,000 bought back in FY23, at a total cost of £9.44m

* Alternative performance measures are detailed, defined and reconciled within Note 4 and the financial review section of this announcement
** LTV Calculation includes finance lease assets and liabilities

Protecting shareholder value whilst continuing to reset and reinvigorate the business for the future
Progress delivered under the four key strategic initiatives is as follows:

Actively managing our assets
Our long-standing strategy of active management and redevelopment, to drive income and capital growth, has continued:
• We now have a well diversified portfolio comprising: 30% invested in retail and leisure; 29% offices; 16% car parks; 13% residential; 8% developments; and 4% hotels
• The portfolio is also very well focused, with 88% located in Leeds and Manchester
• The void rate across our portfolio increased to 8.1% at 30 June 2024 (5.5% at 30 June 2023)
• Strong rent collection for the period of 99.2% (FY23: 99.1%)
• Eleven new commercial lettings and lease renewals at ERV across the portfolio in the period totaling £0.7m of rental income per annum
• Wilko (with one store in the Merrion Centre) and the Merrion nightclub operator entered into CVAs during the period
• Rolling out our own car park management system across our car park portfolio which will ultimately give us both operational and financial efficiencies

Maximising available capital
A conservative capital structure, with a mix of short and long-term secure financing, has always underpinned our approach:
• The first element of deferred consideration arising from the successful sale of our investment in YourParkingSpace Limited was received in July 2023 (£4.4m) with the contingent consideration received in April 2024 (£2.3m)
• After the year end, in July 2024, the final element of deferred consideration was received (£3.1m)
• Comfortable loan to value headroom over our bank facilities of £20.4m based on 30 June 2024 borrowings and valuations
• Loan to value increased to 50.8% following revaluation decreases and impairments in the period and a slight increase in borrowings (FY23: 45.8%)

Investing in our development pipeline
Our development pipeline, with an estimated GDV of over £400m, is a valuable and strategic point of difference for TCS which we continue to progress and enhance. Notably, in the past six months:
• In December 2023 a planning application was submitted for student accommodation as part of the Merrion Centre’s evolution (read full story here). This application incorporates a 1,110 new bed purpose built student accommodation scheme based on the redevelopment of Wade House and the adjacent 100MC site
• Following the securing of a planning consent at Whitehall Riverside in May 2023 (the formal decision notice was then issued in March 2024) we continue to move forward with both build contractors/professional teams and potential tenants for all phases of the development

Acquiring and improving investment assets to diversify our portfolio
We continue to improve investment assets, with a stable portfolio of diverse properties:
• We increased the number of car parks operated under our CitiPark brand to 20, with three new car park management agreements secured in the year
• Acquired a city centre car park investment property leased to NCP in Wellington Street, Sheffield for £1.5m

Outlook – strong financial position to pursue attractive opportunities

• Focus on bringing forward our developments
• Continue to explore opportunities to acquire assets in Leeds and Manchester; appetite to also make acquisitions in London
• Resilient trading performance has continued into the first half of FY25:
o Rent collections remain robust with over 99% of amounts invoiced in the last quarter of the year now collected
o Car parks recovery momentum continues, other than for those reliant on office workers such as Merrion MSCP
o Significant headroom of £20.4m on existing revolving credit facilities
o Weighted average cost of borrowings at period end 5.3%, 87.5% at fixed rates
• The Company’s share price continues to trade at a significant discount to its NAV (50.4% as at 14 October 2024)

To read in full and see all announcements please visit tcs-plc.co.uk/investors

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Town Centre Securities PLC (TOWN.L) 138.00 +2.50 Last updated: 13/11/2024 at 16:35