TIDMSUH
RNS Number : 3274Y
Sutton Harbour Group PLC
04 May 2023
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION,
DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO, THE UNITED
STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS), CANADA,
AUSTRALIA, JAPAN, NEW ZEALAND, SINGAPORE, HONG KONG, THE REPUBLIC
OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD
BE UNLAWFUL OR CONTRARY TO ANY REGULATION.
THIS ANNOUNCEMENT DOES NOT CONSTITUTE A PROSPECTUS OR OFFERING
MEMORANDUM OR AN INVITATION, SOLICITATION, RECOMMATION, OFFER OR
ADVICE IN RESPECT OF ANY SECURITIES AND IS NOT INTED TO PROVIDE THE
BASIS FOR ANY INVESTMENT DECISION IN RESPECT OF SUTTON HARBOUR
GROUP PLC OR OTHER EVALUATION OF ANY SECURITIES OF SUTTON HARBOUR
GROUP PLC OR ANY OTHER ENTITY AND SHOULD NOT BE CONSIDERED AS A
RECOMMATION THAT ANY INVESTOR SHOULD SUBSCRIBE FOR OR PURCHASE OR
OTHERWISE ACQUIRE OR DISPOSE OF ANY SUCH SECURITIES .
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF THE MARKET ABUSE REGULATION (EU NO. 596/2014) AS IT FORMS PART
OF UNITED KINGDOM DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018, AS AMED ("UK MAR"). IN ADDITION, MARKET
SOUNDINGS (AS DEFINED IN UK MAR) WERE TAKEN IN RESPECT OF CERTAIN
OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT
CERTAIN PERSONS BECAME AWARE OF INSIDE INFORMATION, AS PERMITTED BY
UK MAR, PRIOR TO ITS ANNOUNCEMENT. UPON PUBLICATION OF THIS
ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN
THE PUBLIC DOMAIN AND SUCH PERSONS THEREFORE CEASE TO BE IN
POSSESSION OF INSIDE INFORMATION.
4 May 2023
Sutton Harbour Group plc
Subscription to raise GBP2.9m and Trading Update
Sutton Harbour Group plc (AIM: SUH), ("Sutton Harbour", or the
"Company") is pleased to announce that it has conditionally raised
approximately GBP2.9 m (before expenses) by way of a direct
subscription by FB Investors LLP ("FB Investors") for 12,994,407
new ordinary shares of 1p each in the capital of the Company ("New
Ordinary Shares") at the price of 22.5 pence per New Ordinary Share
("Subscription Price") (the "Subscription"). Admission of the New
Ordinary Shares to trading on AIM ("Admission") is expected to
occur on or around 5 May 2023.
Trading update
Trading in the second half year continued in line with
management's expectations. The marinas and car parks both achieved
record revenues for the year ended 31 March 2023. Fisheries trading
was slightly down on the previous year and tenant occupancy
remained strong after allowing for the planned vacation of one
building.
The construction of the 14-apartment building, Harbour Arch
Quay, has progressed well with completion expected by early June
2023. The Company is pleased to announce that it has exchanged
contracts on 10 apartments (including the two penthouses). Exchange
of contracts on two further apartments is hoped to take place
shortly and the last two apartments are being marketed. The Company
intends to relocate its head office to the ground floor of the new
building in the Summer. Having proven the market for the size,
format and location of these apartments, the Company is now working
on a similar sized development at Sutton Harbour, targeting a start
on site by January 2024. These developments are intended to enable
the Company to achieve returns from which bank debt can be reduced
and consequently reduce bank interest obligations.
As expected, the second half year results were undermined by
increasing costs, notably increasing interest rates and the high
cost of energy. Whilst the higher interest rates have persisted
into the new financial year, the Company expects to reduce bank
debt from the net proceeds received from the Harbour Arch Quay
development. Energy costs, which for the second half year were
running at approximately 3.5 times the cost of the first half year,
are now reducing with the outlook for energy costs in the first
half of the new financial year expected to be approximately half of
the energy costs for the six-month period to 31 March 2023. Further
reductions are expected in the second half of the new financial
year.
Valuation
The resilience and performance of the Company's investments and
owner-occupied assets is evidenced in a recent unaudited
independent valuers' report dated 31 March 2023 which values the
portfolio, excluding development sites, at GBP55.355 million, a
GBP1.185 million (or 2.14%) increase on the 2022 valuation. The
valuation of the owner-occupied assets (marinas, car parks and
fisheries) reflects the continued strong trading by both the
marinas and car parks operations. Investment property values have
held up well and the deficit relates almost entirely to a single
property let as office accommodation. A summary of the updated
valuation, including comparatives for 2022, are set out in the
table below:
As at 31 March As at 31 March Increase/(Decrease)
2023 2022
Owner Occupied portfolio GBP38.300m GBP36.125m GBP2.175m
--------------- -------------- --------------------
Investment Property GBP17.055m GBP18.045m (GBP0.990m)
portfolio
--------------- -------------- --------------------
Total Estate portfolio* GBP55.355m GBP54.170m GBP1.185m
--------------- -------------- --------------------
*Excludes property held as development inventory
Strategy and Use of Proceeds of the Subscription
The Company is advancing its plans to deliver comprehensive
regeneration of the East of Sutton Harbour area, including the
consented Sugar Quay development. Following purchases of land in
the area, the Company is exploring further strategic opportunities
to acquire land (which is expected to be subject to separate
funding) to permit delivery of a new urban village with strong
links to the Harbour, City Centre and other local amenities.
Additionally, the Company is focused on the opportunity for the
regeneration of the Former Airport Site and intends to submit a
planning application for the site later this calendar year. A
five-year-long protection for aviation operations, expires in March
2024. The Company has maintained the site for over 11 years, since
closure of the airport, and the proposed plans are expected to show
the significant opportunity in the alternative use of the site for
healthcare, education, mixed-use housing and commercial space.
The net proceeds received under the Subscription are intended to
support progress on these two key strategies, which have material
potential for value creation, and for ongoing activities.
The Subscription
FB Investors has subscribed for 12,994,407 New Ordinary Shares
in the Subscription, following which FB Investors will be
interested in 107,691,157 ordinary shares, representing
approximately 75.37% of the Company's issued ordinary shares as
enlarged by the Subscription.
The Subscription is conditional on the Company's having received
the Subscription monies from the subscriber prior to Admission and
on Admission becoming effective by not later than 8.00 a.m. on 5
May 2023 (or such later time and/or date as the Company, the
subscriber and Strand Hanson Limited ("Strand Hanson") may
determine).
The Subscription Price is equal to the closing mid-market price
of the Company's ordinary shares on 3 May 2023, being the latest
practicable date before this announcement. The New Ordinary Shares
are being issued under the Company's existing shareholder
authorities.
If either condition of the Subscription is not satisfied, the
New Ordinary Shares will not be issued, and all monies received
will be returned to the subscriber as soon as possible thereafter.
The Subscription is not being underwritten.
Relationship Agreement
FB Investors has entered into a new relationship agreement
("Relationship Agreement") with the Company and the Company's
nominated adviser, Strand Hanson, on terms substantially similar to
the previous FB Investors relationship agreement from November
2017. The principal purpose of the Relationship Agreement is to
provide that the relationship between FB Investors (and its
Connected Persons, as defined therein) and the Company will be
conducted independently and on an arm's length basis. The
Relationship Agreement, amongst other things, provides FB Investors
with the ability to appoint up to two directors to the Company's
board ("Board") (one of whom may be the Chairman) for so long as it
holds, directly or indirectly, 50% or more of the issued voting
share capital of Company and contains certain restrictions in
relation to directors appointed by FB Investors voting at meetings
of the Board on matters in which FB Investors is interested. Under
the Relationship Agreement, FB Investors has agreed not to vote in
relation to certain resolutions of the shareholders of the Company,
including a resolution put to the Company's shareholders to cancel
its admission to trading on AIM pursuant to Rule 41 of the AIM
Rules unless such resolution is in conjunction with an offer for to
acquire the ordinary shares of the shareholders of the Company
other than the Company's Substantial Shareholders (as defined in
the AIM Rules) at that time, on terms approved by the Board that
are considered fair and reasonable having regarding to the
interests of all shareholders. The Relationship Agreement remains
in force for so long as FB Investors' holding does not drop to
below 20%.
Related Party Transaction
The Subscription by FB Investors constitutes a related party
transaction for the purposes of the AIM Rules, as Beinhaker Design
Services Limited is a member of FB Investors, which, (prior to the
Subscription) holds a 72.91% holding in the Company, and is
controlled by the Beinhaker family, including Corey Beinhaker and
Philip Beinhaker, each a director of the Company.
The directors who are independent of the transaction, being
Graham Miller, Sean Swales and Natasha Gadsdon, having consulted
with the Company's nominated adviser, Strand Hanson, consider that
the terms of the transaction are fair and reasonable insofar as
shareholders are concerned.
AIM Admission and Total Voting Rights
Application will be made to the London Stock Exchange plc for
the 12,994,407 New Ordinary Shares to be admitted to trading on
AIM. Dealings in the New Ordinary Shares, which will all rank pari
passu with the Company's existing ordinary shares, are expected to
commence at 8.00 a.m. on or around 5 May 2023 (or such later time
and/or date as Strand Hanson, the subscriber and the Company
agrees).
Following Admission, there will be 142,939,108 ordinary shares
of 1p each in issue. This number may be used by shareholders as the
denominator for the calculation by which they will determine if
they are required to notify their interest in, or a change in their
interest in, the share capital of the Company FCA's Disclosure
Guidance and Transparency Rules.
For further information, please contact:
Sutton Harbour Group p lc
Philip Beinhaker - Executive Chairman
Corey Beinhaker - Chief Operating Officer
Natasha Gadsdon - Finance Director +44 (0) 1752 204186
Strand Hanson Li mited
(Nominated & Financial Adviser and Broker)
James Dance
Richard Johnson +44 (0) 20 7409 3494
Notes to Editors
Sutton Harbour Group plc (SUH) is an AIM quoted company
specialising in marine operations, waterfront regeneration and
destination creation in Plymouth and Southwest 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 Group plc 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
MSCFLFIREAIVIIV
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May 04, 2023 02:00 ET (06:00 GMT)
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