Half year results for the six months ended 31 December 2021

March2022

Town Centre Securities PLC, today announces its results for the six months ended 31 December 2021.

Protecting shareholder value whilst continuing to reset and reinvigorate the business for the future

Financial performance

Net assets:
o Like for like portfolio valuation up 2.4% from June 2021
o Statutory net assets of £165.1m or 313p per share up 6.2% (FY21: £155.4m, 292p). EPRA net tangible assets (‘NTA’)$ measure at £160.7m or 305p per share (FY21 equivalent: £151.0m, 284p)
Profits and earnings per share (HY21 comparatives significantly affected by an estimated £3.2m COVID-19 impact):
o Statutory profit before tax of £10.5m (HY21: loss of £3.5m) and statutory earnings per share of 19.8p (HY21: loss of 6.6p)
o EPRA Earnings$ before tax of £2.6m (HY21: £0.0m)
o EPRA earnings per share$ of 5.0p (HY21: 0.0p)
Shareholder Returns:
o Interim dividend of 2.5p (HY21: 1.75p) reflecting the strong bounce back in earnings
o Earnings and NAV enhancing share buy back commenced in 2021 and continued in 2022 (631,351 shares bought back up to 11 February 2022)

We have made meaningful progress in resetting and reinvigorating the business in the past six months. Progress delivered under the four key strategic initiatives is as follows:

Actively managing our assets
• The proportion of retail and leisure assets in the portfolio has reduced to 30% from 40% in June 2020, and down from 60% in 2016, following the sale of over £80m of assets since March 2020
• Pure retail now represents only 22% of the total portfolio of which 53% is in the resilient Merrion Estate
• 34 new lettings and lease renewals across the Group’s portfolio in the period
• Only one tenant entered into a CVA during the period reflecting our resilient tenant portfolio

Maximising available capital
• Three properties sold during the six months (in Harrogate, Leeds and London)
o Aggregate proceeds of £22.5m crystalising a profit on disposal of £1.2m
o Three further properties sold in the first quarter of 2022 at prices in aggregate above book value (two of which were categorised as assets held for sale on the balance sheet of the Company at 31 December 2021) for a total consideration of £15m
• Loan to value headroom over our bank facilities of £7.9m based on 31 December 2021 borrowings and valuations, rising to over £21m following the three sales made after the period end and the inclusion of the Hampstead property within the banking security pool
• Loan to value* reduced to 50.0% (FY21 equivalent 51.3%). Following the above three further sales this reduces to 47.7%
• Following the period end, we have agreed to buy back for cancellation £3.4m of our £99.5m 2031 5.375% debenture stock for a total consideration of £3.74m including accrued interest, helping to reduce debt and average interest

Acquiring and improving investment assets to diversify our portfolio
• Completed during the period the £7m acquisition of 58-62 Heath Street, Hampstead, London, a prime mixed-use property
• Opportunity to redevelop, repurpose and modernise our Wade House office (having been vacated by StepChange Debt Charity), the third of our four Merrion Estate offices, a potentially valuable opportunity given the level of new development in the surrounding area

Investing in our development pipeline
• Our development pipeline, with an estimated GDV of over £600m, is a valuable and strategic point of difference which we continue to progress and improve
$ Additional EPRA measures are described in greater detail further on in these half year results with EPRA earnings and earnings per shares detailed, defined and reconciled within note 5 of these half year results
* Loan to value is calculated as the amount of financial liabilities less cash and cash equivalents (including overdrafts) as a percentage of total assets less cash and cash equivalents

Commenting on the results, Chairman and Chief Executive, Edward Ziff, said:

“We have seen a good recovery across all three segments of the business in the past six months with good momentum continuing into the early part of 2022. We also believe today’s results evidence the success of our new strategic direction, to reset and reinvigorate the business for the future.”

“Our level of rent receipts has been resilient throughout the Covid-19 period, and has now recovered back to pre-pandemic levels, an indicator of the diversified strength of our property portfolio, combined with the relative strength of, and our long-term relationships with, our tenants.”

“Our shareholder returns initiatives have been bolstered by continuing property sales, and by our confidence in the potential of, and progress within, our £600m development pipeline.”

“Over the coming months the effect the Ukraine conflict will have on the wider economy will hopefully become clearer. The impact of inflationary pressures on our business will include changes to consumer spending, increased property and other expenses, increased construction costs and rent affordability for tenants.”

“Notwithstanding the macro-economic and geopolitical environment, we remain committed to delivering on our accelerated four pillar strategy of: actively managing our assets, maximising available capital, investing in our development pipeline and acquiring and improving investment assets to diversify our portfolio.”

To view and download Announcements and Notice of Results please visit:
tcs-plc.co.uk/announcements

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Town Centre Securities PLC (TOWN.L) 138.00 +3.50 Last updated: 29/06/2022 at 16:30