TIDMGABI TIDMGABC
RNS Number : 1637P
GCP Asset Backed Income Fund Ltd
15 October 2021
15 October 2021
GCP Asset Backed Income Fund Limited
(the "Company" or "GCP Asset Backed")
LEI: 213800FBBZCQMP73A815
Net Asset Value and Investment Update
GCP Asset Backed, which invests in asset backed loans, announces
that, as at 30 September 2021, the unaudited net asset value
("NAV") per ordinary share of the Company (including current period
revenue) is 98.94 pence per share.
NAV
The NAV performance for the 3 month period is a negative
movement of 3.77 pence per share after the payment of dividends, a
decrease of 3.67 per cent.
The negative NAV performance for the period was driven by the
write-down of the Co-living Group loan as announced on 13 September
2021.
The rest of the Company's investments continued to perform as
expected in the period to 30 September 2021, with all principal and
interest payments received as anticipated [1] .
Portfolio Update
The only portfolio assets that remain categorised as high risk
are the Co-living Group loan and the two community facility loans,
representing an aggregate 5.84% of the total portfolio value.
Co-living
Further to the announcements of 13 September and 16 September,
we are pleased to report that the credit bid is proceeding as
planned. The first two assets have transferred to the acquisition
vehicle, and it is anticipated that the remaining four assets will
transfer over the coming weeks.
The negative NAV movement of 3.77p is greater than the 3.69p
reduction announced on 13 September as a result of no income being
recognised on the entirety of the loan in the period.
Occupancy across the operating assets was strong in the period.
The UK assets are all at or above 90% in occupancy and the US
operating asset reported its strongest month of the year in
September.
The lenders to the Co-living Group are holding discussions with
several parties who are interested in buying assets which are not
part of the credit bid and hope to transact on a number of these in
the coming weeks. The Investment Manager continues to look to
realise value across all elements of the Co-living Group and
continues to believe there is additional value to be found from
these other assets. We are seeking to remain conservative and will
only move the valuation upwards as these sums are realised, though
it should be noted that current discussions would not lead to a
material movement in the Company's NAV.
Community Facility
The Company has provided loans to two community facilities.
These facilities house a variety of small businesses including
bars, food outlets, co-working and studio space.
A sale process was commenced in the period for the two community
assets, with the appointment of a preferred bidder occurring at the
end of September. It is expected that the transaction will complete
before the end of October.
We do not expect a reduction in the carrying value of these
loans as a result of the transaction and believe that the preferred
bidder will be able to fully realise the value of the
facilities.
General
The portfolio continues to rotate well with GBP36.8m repaid and
GBP16.6m deployed in the period. The Investment Manager continues
to target loans to borrowers it already knows and in sectors that
have performed well for the Company.
The Company's interim results for the six months ended 30 June
2021 were released on 28 September 2021.
Dividends
On 22 July 2021, the Company declared a quarterly dividend in
respect of the period from 1 April 2021 to 30 June 2021 of 1.575p
per share, which was paid on 27 August 2021.
Outlook
Whilst endeavouring to recover value from the Co-living Group
loan has been a primary focus for the Investment Manager over the
period, we remain encouraged by the continued performance and
strong cash generation of the wider portfolio. We continue to have
access to funds as loans repay, including GBP20m which has been
repaid post period end and we have a pipeline of opportunities
which is in excess of our available capital.
The Investment Manager will be holding a webinar on 3 November
2021 at 10am to provide more detail on the portfolio. For any
investor interested in joining, please e-mail
zoe.french@graviscapital.com .
For further information, please contact:
Gravis Capital Management Ltd +44 (0)20 3405 8500
David Conlon
Joanne Fisk
Investec Bank plc +44 (0)20 7597 4000
Helen Goldsmith
Denis Flanagan
Neil Brierley
Buchanan/Quill +44 (0)20 7466 5000
Helen Tarbet
Sarah Gibbons-Cook
Henry Wilson
Notes to Editors
GCP Asset Backed is a closed ended investment company traded on
the Main Market of the London Stock Exchange. Its investment
objective is to generate attractive risk-adjusted returns primarily
through regular, growing distributions and modest capital
appreciation over the long term.
The Group seeks to meet its investment objective by making
investments in a diversified portfolio of predominantly UK based
asset back loans which have contracted, predictable medium to long
term cash flows and/or physical assets.
[1] As previously reported by the Company the CHP and ROC loan
remains in default and no interest payments are expected on this
loan.
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