Interim Management Statement

RNS Number : 7489M

Quintain Estates & Development PLC

04 February 2009

 



4 February 2009

Quintain Estates & Development PLC

('Quintain' / 'Company' / 'Group')

THIRD QUARTER INTERIM MANAGEMENT STATEMENT

Adrian Wyatt, Chief Executive of Quintain, commented:

'Through this period of market uncertainty Quintain's Board maintains its belief in the significant value inherent within the urban regeneration schemes and fund management business and continues progressively to increase the resilience of the Company against the impact of negative market conditions.

'Since announcing last August our priorities in managing the business through this difficult environment, we have held firmly to the principles of maximising revenue, restricting capital expenditure and minimising costs. We continue to make operational progress, most notably in generating income through the ongoing strong performance of the Quercus healthcare fund, achievement of 99.6% rental levels within the iQ student accommodation fund and in securing significant lettings during the period.'

Finance

As at 31 December 2008 net borrowings, excluding non-recourse debt within joint ventures, were reduced by a further £17m to £539m, compared with £556m at 30 September 2008. During the period, following on from the reduction in base rates, we fixed £100m of debt at 3% in order to give us greater certainty of interest costs. This resulted in 100% of our debt being hedged, 74% covered by swaps and the remainder by caps. The average cost of debt for the three months was 5.3% (30 September 2008: 6.3%). Whilst the Company is not immune from the general deterioration in the property market it remains covenant compliant and cash repatriation in the nine months to 31 December was £83m, taking us close to our target of £100m for the full year.

With new lettings since 30 September 2008, the rent roll is forecast to increase from £21.0m to £22.1m for directly owned properties, and from £19.4m to £24.6m being Quintain's share of rent from indirect properties. 

Key events 

Sales

• The deal to sell 163 affordable units within W04 at Wembley City to registered social landlords has been completed with the final payment to Quintain of £9.6m

• Sales of 52 of the 145 private apartments within Forum House at Wembley City have now completed

• Two properties were sold from the Quercus portfolio for a combined total of £1.9m against a September 2008 valuation of £1.7m 

• The Felix Hotel, Cambridge, was sold during the period for £2.9m against a September 2008 valuation of £3.4m

Leases

• Transport for London has exercised its option on an additional two floors of office space comprising 61,000 sq ft, taking its total lease at Greenwich Peninsula to 196,000 sq ft and becoming the sole occupant of the first building

• Our Wembley residential lettings business continues to secure tenants for purchasers of apartments in Forum House at excellent prices, leasing 16 apartments to date at rental levels up to 50% above advertised prices for equivalent properties in the immediate surrounding area. These lettings represent yields of between 5 and 6%  

• A lease was agreed with Network Rail regarding Hudson House in York, realising a 56% increase in rent from 25 December 2008 to £0.7m per annum

• With the demise of Land of Leather and MFI, bad debt write-offs at the end of the quarter stood at £0.26m (Dec 07: £0.18m). However, this is set against a new lease signed during the period with Euro Storage Ltd amounting to £0.2m per annum

• Underlying rental collection remains strong with 99.78% of rents, excluding bad debts, collected prior to the December quarter date (September: 99.33%)

• InBev, owner of brands such as Becks, Staropramen and Stella Artois, has signed a two year deal for exclusive beer category pouring rights at Wembley Arena for two years 

• Occupancy levels within our iQ student accommodation fund have now reached 99.6%, with only 9 beds unoccupied across the portfolio

Performance fees

• The strong relative performance of Quercus during 2008 is expected to give rise to a performance fee for Quintain of approximately £6m. The Fund was ranked by IPD as fourth among its peer group of 65 funds, second among specialist funds and first among geared funds for the quarter to 31 December 2008.

For further information please contact:

Quintain Estates & Development plc

Rebecca Worthington / Cressida Eccleston

Tel:    [phone]

Financial Dynamics

Stephanie Highett / Dido Laurimore / Laurence Jones

Tel:    [phone]

Forward looking statements

This document may contain certain forward looking statements. By their nature forward looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from any outcomes of results expressed or implied by such forward looking statements.

Any forward looking statements made by or on behalf of Quintain speak only as at the date they are made and no representation or warranty is given in relation to them, including as to their completeness for accuracy or the basis on which they were prepared. Quintain does not undertake to update forward looking statements to reflect any changes in Quintain's expectations with regard thereto or any changes in events, conditions or circumstance on which any such statement is based.

Information contained in this document relating to the Company should not be relied upon as an indicator of future performance.

 

END

 

 

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