FIH Group PLC Property Acquisition (4533J)
05 December 2018 - 6:00PM
UK Regulatory
TIDMFIH
RNS Number : 4533J
FIH Group PLC
05 December 2018
5 December 2018
FIH group plc
("FIH" or "the Group")
Property Acquisition
FIH group plc is pleased to announce that it has exchanged
contracts on the purchase of the freehold of a 2.5 acre industrial
estate in Leyton, East London. The site consists solely of five
warehouses operated by Momart, the Group's art handling subsidiary,
and is located 5 miles north of London's Canary Wharf financial
centre near the Queen Elizabeth Olympic Park.
The freehold purchase effectively exchanges the Group's former
leasehold interest and associated escalating property rents
(currently of c.GBP0.8 million per annum) for the security of
tenure offered by ownership of the land and specialist buildings
located on the site. On completion of the purchase, bank interest
costs and related annual depreciation of the buildings will be
broadly matched by the rent savings but over the medium term the
enhancement to future earnings and cash flow are anticipated to
become meaningful.
The purchase price of the freehold (including stamp duty land
tax) was GBP19.4 million and the property was acquired from
Momart's longstanding landlords, H. Young & Co. Limited, who
marketed the property for sale in October 2018.
FIH will finance the purchase of the property using part of its
own cash reserves and by drawing down new secured mortgage
facilities at completion. On conclusion of the transaction, the
Group will still retain significant cash resources to invest in the
future expansion of its other operations, most notably in the
Falkland Islands where there are exciting prospects for growth over
the medium term.
Momart has operated from the site since 2003 and has gradually
expanded its activities, most recently in early 2017 when it opened
a new warehouse for the storage of fine art. Momart's operations on
the site comprise 100,000sq ft of dedicated, highly specified, well
maintained, modern units of steel portal frame construction with
profiled metal sheet cladding.
Commenting on the acquisition John Foster, FIH Chief Executive
said:
"We are pleased to have acquired the Leyton property as this
will result in significant savings of annual rent for the Group and
removes the prospect of a continuing escalation in future operating
costs. By acquiring the land we have also provided Momart with long
term security of tenure and removed the risk of future disruption
to the business at the expiry of the former leases. We are
confident that over the medium term the purchase will generate
meaningful cash savings for the Group and will both enhance and
improve its quality of earnings."
Enquiries:
FIH group plc
John Foster, Chief Executive Tel: 01279 461 630
WH Ireland Ltd. - NOMAD and Broker
to FIH
Adrian Hadden / Jessica Cave Tel: 020 7220 1666
FTI Consulting - Communications adviser
to FIH
Alex Beagley / Eleanor Purdon Tel: 020 3727 1000
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END
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