Bruntwood Bond 2 PLC October performance update
25 October 2021 - 6:00PM
RNS Non-Regulatory
TIDMBRU2
Bruntwood Bond 2 PLC
25 October 2021
25th October 2021
BRUNTWOOD GROUP LIMITED
BRUNTWOOD BOND 2 PLC
OCTOBER 2021 UPDATE STATEMENT
Bruntwood Group Limited ("Bruntwood") today updates the market
on the ongoing impact of the Covid-19 pandemic on its business and
a summary of the latest rent collection position.
Chris Oglesby, CEO of Bruntwood, said
"We have had a strong year for lettings with 1.1 million square
feet let or instructed with solicitors. We had a particularly
strong last quarter seeing 440,000 square feet instructed across
the Bruntwood Group. This has given us the confidence to accelerate
the development of the next 220,000 square foot phase of Circle
Square and we are also now actively pursuing acquisition
opportunities, particularly in Manchester City Centre where vacancy
is now below 7% which means that we now require further stock to
facilitate the expansion of our valued customer base.
Across all locations, footfall in our buildings has demonstrated
a positive trend in the last quarter and has increased from 40% of
pre-pandemic levels to 60% in recent weeks as there is an
increasing trend for people to return to office working for at
least some of the working week. We know from engagement in the
business communities in our cities the value that businesses are
placing on their offices as places for people to collaborate,
create and develop strong business cultures. There is a growing
recognition about the impact of long term homeworking on colleagues
mental wellbeing and career development both of which have major
impacts on individuals and businesses"
Financial Position
On 30th September 2021 Bruntwood agreed a 12 month refinance and
extension of its GBP240m loan facility with a syndicate of lenders
out to March 2023. The Bruntwood Group is actively considering how
to best fund its next stage of growth and therefore only a short
term extension was sought at this time to avoid paying unnecessary
fees in the event that the group's borrowing is restructured in the
near future.
As at 20th October, the Group had GBP15.3m of cash reserves
(compared to GBP30m on 21 July, the date of the last update),
GBP57.5m of undrawn committed available facilities and GBP72m of
unencumbered assets upon which further finance could be secured. In
addition, the group has GBP19m of retained bonds which it could
issue to the market.
The board are currently finalising the financial results for the
year ended 30th September 2021, including full external
revaluations of the portfolio. It is very pleasing to report that
we have had a strong year in the circumstances. The trading losses
which we budgeted for at the start of the year did not materialise
and the investment market in our strong regional cities has held up
meaning that we will be reporting positive valuation movement year
on year. We will be releasing our full results nearer to Christmas
but they are testament to our strong customer focussed ethic, the
hard work of our colleagues and our market leading product.
Nevertheless, the Board continues to model various downside
scenarios including reviewing estimated customer default rates,
lower retention rates, higher concessions and valuation yield
movement, but we are increasingly confident that such scenarios are
unlikely to materialise. 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 25% across our facilities and
likely to improve as a result of the latest external valuations.
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 GBP72m of unencumbered assets
would provide the resources to remedy any breaches in such
circumstances. The earliest major bank facility maturity is not
until March 2023.
Impact on Operations
As of 20th October 2021, 86% of September rents had been
collected. This is ahead of June / March / December quarters at a
comparable point. We continue to speak with all our customers on a
regular basis and work with every customer to support them as far
as possible through what remains challenging times for some. We
will continue to work closely with all customers and where support
is required we will seek to reach a fair solution for everyone.
To date, 97% of June, over 97% of March and 98% of December
rents have been collected with the balance being on payment plans
or being actively pursued at the date of this announcement.
Strong cash collection and a focus on controlling non-essential
expenditure has ensured that the business continues to stay cash
positive before capital outlay is taken into account. Across the
Bruntwood portfolio, retention levels at break and expiry are in
excess of 70% and vacancy levels are currently 9.8%, showing a
consistent positive trend across the year.
Headline rents remain consistent with previous run rates and
rent free concessions and fit out contributions required to secure
new lettings have been reasonably consistent over the last six
months and are aligned with our forward plan assumptions.
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
Patrick King (Peel Hunt) +44 (0) 203 597 8622
Mark Glowery (Allia C&C) +44 (0) 203 039 3465
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 Reach, the non-regulatory press
release distribution service of RNS, part of the London Stock
Exchange. 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.
Reach is a non-regulatory news service. By using this service an
issuer is confirming that the information contained within this
announcement is of a non-regulatory nature. Reach announcements are
identified with an orange label and the word "Reach" in the source
column of the News Explorer pages of London Stock Exchange's
website so that they are distinguished from the RNS UK regulatory
service. Other vendors subscribing for Reach press releases may use
a different method to distinguish Reach announcements from UK
regulatory news.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
NRABLBDGGDDDGBD
(END) Dow Jones Newswires
October 25, 2021 03:00 ET (07:00 GMT)
Bruntwood Bd 6% (LSE:BRU2)
Historical Stock Chart
From Nov 2024 to Dec 2024
Bruntwood Bd 6% (LSE:BRU2)
Historical Stock Chart
From Dec 2023 to Dec 2024