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RNS Number : 3222Z
Sutton Harbour Group PLC
14 September 2022
14 September 2022
Sutton Harbour Group plc (the "Company")
Annual General Meeting Statement
The Chairman of Sutton Harbour Group plc will issue the
following update to shareholders attending today's AGM.
Since my last update in the Annual Report published in July
2022, I am pleased to report that Summer trading has been strong,
particularly at our marinas where annual berthing was fully sold,
and at our car parks where usage has returned to pre-Covid levels.
Occupancy of rental property has remained robust to date, although
some office tenants, whose leases are close to expiry, are
reconsidering future requirements and this may present an
opportunity for alternative uses within the Company's estate
portfolio.
The construction of Harbour Arch Quay is now well underway with
the service core built to full height and the third floor (of
eight) now built. Exchanges have taken place on two (of fourteen
apartments) with a further five reservations in line to progress to
exchange.
The refurbishment of Old Barbican Market building is close to
completion with incoming tenants progressing their fit-out works.
It expected that two tenants, where leases are complete, will start
trading from the premises next month. Once complete, the building
at the heart of the historic Barbican will provide a café/bakery,
retail store and bar/restaurant, each of high quality, to add to
the overall amenity of the area.
Following on from these new developments, a pipeline of material
projects is ready to continue the stated strategy of value growth
to shareholders.
The Company has been in active consultation with the Local
Authority and users over the redevelopment of the Plymouth
Fishmarket resulting in the 'pre-application' submission to the
Local Planning Authority, which has recently been approved in
principle. This major project will proceed in line with the
Council's Port Strategy for Plymouth and delivery of the
redevelopment will modernise facilities for the fishing industry,
improve access to the National Marine Aquarium, include the
presence of a new retail fishmarket and enhance the vibrancy for a
sustainable Sutton Harbour.
Whilst the 14 apartment Harbour Arch Quay development has
provided the Company with current experience in development around
Sutton Harbour after more than a decade's hiatus, the scale of the
consented 170 apartment Sugar Quay development will be
transformative. Sugar Quay will be the landmark presence at Sutton
Harbour with its iconic design over 20 storeys and has the scale
for material development returns.
At the request of the Local Authority, the Company has entered
into discussions regarding valuation of the former Plymouth City
airport site, on which the Company has a long unexpired leasehold
interest. The Company recorded the airport site at historical cost
on its balance sheet at GBP13.2m as at 31 March 2022. However, the
Company has maintained the site and carried the cost of capital
invested for nearly eleven years since it was closed. The present
value of the carried cost is approximately GBP27m and a valuation
of the land on a development basis, prepared for the Company by an
expert valuer, is considerably higher than the present carried
cost. Whether the former airport site is realised for the Company
through a transaction or ultimate development, the site is expected
by the Board to continue to become more valuable as demand for land
in Plymouth for industrial, residential or other uses continues to
increase.
Realisation of Sugar Quay and whatever ultimate use of the
former airport site would create material value for shareholders
together with the public benefits of bold regeneration in urban
Plymouth. The timing of these strategic moves will be dependent on
the overall macro-economic environment and the need for settling of
the current uncertainties of rising inflation and cost of
capital.
After an encouraging Summer, the Company has prepared for the
upcoming challenges of the second half year. The Company's current
power contract expires on 30 September and the uncertainty and
volatility in the energy markets has prevented the Company's
suppliers and brokers from providing a firm renewal price. The
Company will settle a new contract as soon as possible, but has
prepared for the consequences of a sharp increase in energy costs.
A significant proportion of the Company's energy cost is recharged
to tenants and harbour users.
Interest paid by the Company on its bank debt has been steadily
increasing in line with base rate increases. Other loans, including
the development finance for Harbour Arch Quay and related party
loans, announced and drawn down in May 2022, are both at fixed
rates of interest. At the present time, the Company has not entered
into any interest rate fixing agreements due to the high cost of
doing so, however this remains under monthly review by the Board.
The Company is in discussions with its bankers regarding the
extension or renewal of its current facilities. The Company has
also received expressions of interest from other banks regarding
corporate and real estate finance.
Other costs will be impacted by general inflationary pressures
although many of the key cost inputs, including salaries, are now
fixed or contracted for the remainder of the financial year.
I reported on a six-month long programme to replace the lock
cills in my July report. These works are now rescheduled for the
next financial year and the Company is in active discussions with
the Environment Agency and harbour user groups about a revised
works timetable with a longstop date of March 2024.
Post the completion of Old Barbican Market and Harbour Arch
Quay, the Company looks forward to the larger strategic
developments to deliver long term value and revenue growth to
shareholders.
The Interim Results for the 6 month period to 30 September 2022
are due to be published in early December 2022.
Enquiries
Sutton Harbour Group +44 (0) 1752 204186 Philip Beinhaker, Executive
plc Chairman
Corey Beinhaker, Chief Operating
Officer
Natasha Gadsdon, Finance Director
Strand Hanson Limited +44 (0) 20 7409 James Dance
(Nominated and Financial 3494 Richard Johnson
Adviser and Nominated
Broker)
Notes to Editors
Sutton Harbour Group plc (AIM: SUH) is an AIM quoted company
specialising in marine operations, waterfront regeneration and
destination creation in Plymouth and South West England.
The Company operates Sutton Harbour Marina, King Point Marina
and Plymouth Fisheries. Operational activities include mixed-use
lettings, car parking and support services to harbour users,
property management and regeneration and asset enhancement.
Sutton Harbour is committed to being the leading marine and
waterfront regeneration specialist in Southern England, and to
positioning Sutton Harbour in Plymouth as a destination of national
interest.
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END
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