BRU2 Bruntwood Bd 6%

TIDMBRU2

Bruntwood Bond 2 PLC

24 July 2020

24th July 2020

BRUNTWOOD GROUP LIMITED

BRUNTWOOD BOND 2 PLC

UPDATE STATEMENT ON COVID-19 AND LATEST RENT COLLECTION

Bruntwood Group Limited ("Bruntwood") today updates the market on the impact of the Covid-19 pandemic on its business, including a summary of the latest rent collection position.

Chris Oglesby, CEO of Bruntwood, said

"Our primary focus remains the safety and well-being of our employees and customers. during this challenging period. The Bruntwood team has been operational throughout with full access to our central systems and communications network supporting customers and working with other business partners. Colleagues and customers have begun returning to our buildings and city locations, where we have adapted spaces to provide safe workplaces and effective social distancing measures.

Financial Position

Following the repayment of the 2020 Retail bonds on the 24th July and the drawdown of a GBP10m development facility for our Booths Park No6 development the group will have GBP30m of cash reserves, GBP50m of undrawn committed available facilities and GBP68m of unencumbered assets upon which further finance could be secured.

The Board has modelled various scenarios including reviewing estimated customer default rates, lower retention rates, higher concessions and valuation yield movement. Based on the output of these models, The Board considers there to be sufficient income and valuation headroom across Bruntwood's debt facilities and does not expect Bruntwood to breach any terms relating to them. We have modelled the forecast covenant performance on each loan facility. Valuation covenant headroom is in excess of 30% on the majority of our facilities and in excess of 20% on our NatWest Club facility. Income would have to fall by over 30% on all of our facilities before any interest cover covenants are breached. In addition, we would expect that the existence of GBP68m of unencumbered assets would provide the resources to remedy any breaches in such circumstances. The earliest major bank facility maturity is not until March 2022.

Impact on Operations

Bruntwood has a well diversified customer base and is not exposed to the failure of any single customer or sector. We have sought to pass on the benefit of any savings made by Bruntwood in respect of lightly utilised customer space during the Covid period, and we continue to work with customers in response to any requests for support which are considered on a case by case basis.

As of 22nd July 2020, 92% of March quarter rents were collected with the balance being on payment plans or being actively pursued at the date of this announcement.

As at 22nd July 2020 75% of June quarter rents had been collected. This is in line with the March quarter but behind the 92% collected at the same date last year. We have engaged with almost the entire customer base and to date have received requests for support from customers representing less than 5% of the rent roll. The majority of requests relate to the deferral of rent rather than the waiver of liabilities. We are working closely with these customers to reach a fair solution, and will continue to closely monitor rent receipts over the coming quarter.

Strong cash collection and reduction in non-essential overheads has meant that the business continues to run cash positive before capital outlay is taken into account. Activity levels are beginning to increase which is enabling us to bring back colleagues from furlough. As at 22nd July, 300 colleagues remain on furlough out of a workforce of 867. The majority are expected back before the end of September 2020. Dividend payments remain suspended.

The 100% pre-let 90,000 square foot Citylabs 2 reached practical completion in July. The 100% pre-let 70,000 square foot Booths Park No 6 is on target to complete in early 2021. The 400,000 square foot first commercial phase of Circle Square (part of the SciTech JV with Legal and General) is on track to reach practical completion in November 2020. The majority of the latter scheme is either exchanged or instructed with solicitors but further phases of Circle Square will only be commenced when instructed lettings become contractually unconditional. Further development schemes will only proceed based on the achievement of pre-let hurdles. All of our current major development schemes are pre-funded with any equity requirement having already been injected.

ENDS

For further information, please see Bruntwood's website at https://bruntwood.co.uk/ or contact:

 
 Kevin Crotty (Chief Financial Officer)    +44 (0) 161 212 2222 
 Sean Davies (Director of Financing 
  & Investment)                            +44 (0) 161 212 2222 
 

Forward-Looking Statements: This announcement contains certain forward-looking statements with respect to Bruntwood's expectations and plans, strategy, management objectives, future developments and performances, costs, revenues and other trend information. These statements are subject to assumptions, risk and uncertainty. Many of these assumptions, risks and uncertainties relate to factors that are beyond Bruntwood's ability to control or estimate precisely and which could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. Certain statements have been made with reference to forecast process changes, economic conditions and the current regulatory environment. Any forward-looking statements made by or on behalf of Bruntwood are based upon the knowledge and information available to Directors on the date of this announcement. Accordingly, no assurance can be given that any particular expectation will be met and Bruntwood's bondholders are cautioned not to place undue reliance on the forward-looking statements. Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority), Bruntwood does not undertake to update forward-looking statements to reflect any changes in events, conditions or circumstances on which any such statement is based. Past bond performance cannot be relied on as a guide to future performance. Nothing in this announcement should be construed as a profit forecast. The information in this announcement does not constitute an offer to sell or an invitation to buy securities in Bruntwood or an invitation or inducement to engage in any other investment activities.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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