Minerva plc, the quoted real estate company, today announces its
Preliminary Results for the year ended 30 June 2009.
Financial highlights
- Property revaluation deficit in the year of 28.4 per cent.
- Loss before tax and property revaluation movements of £4.6
million (2008: £12.8 million).
- Loss after tax of £287.1 million (2008: £231.9 million).
- Net liability per share, reflecting trading properties at cost,
of 28.8 pence per share (30 June 2008: net asset per share 187.7
pence).
- Diluted EPRA net asset value per share of 47.1 pence (30 June
2008: 239.8 pence).
Financing highlights
The Group has completed important negotiations with its banks, both
during the year and since the year end, which provide the Group
with a stable financial platform going forward:
- During the year, the Group completed the refinancing of three
loan facilities. Before the refinancing, the facilities totalled
£84.5 million and had maturities of less than one year. These have
been refinanced with new facilities totalling £68.6 million, and
the maturities have been extended by, on average, more than 2
years.
- Since 30 June 2009 the Group has also extended four facilities
which were due to expire in 2010. Following this, the Group is now
in the position where it has no scheduled loan maturities during
the current or the next financial year.
- The Group has removed and/or deferred financial loan covenants
on loan facilities approaching £600 million, which were previously
due to be tested on the position at 30 June 2009.
- With the exception of two loan facilities totalling £43.6
million, the Group has no net worth or loan to value covenants
which are to be tested during the two financial years ending 30
June 2011.
- The Group has sufficient undrawn facilities and committed funds
to complete the developments under construction.
Operational highlights
Despite a challenging economic environment and the continued
deterioration in the real estate market, Minerva has achieved key
project milestones in the last 12 months:
- Construction continues on The Walbrook and St Botolphs
developments in the City of London and on the Lancaster Gate
development overlooking Hyde Park. Building work on all three
developments is on track, with The Walbrook expected to be
completed to ‘shell and core’ specification in December 2009.
- Planning permission for Odeon Kensington was granted for a
circa 100,000 sq.ft. all-private residential scheme. This will,
once developed, comprise 35 apartments, five town houses, a
basement car park, multi-screen cinema and off-site affordable
housing.
- A resolution to grant planning consent for more than one
million sq.ft. of residential and commercial accommodation was
achieved for the Ram Brewery in December 2008. Despite the full
backing of the Mayor of London, the Secretary of State called in
the application and the Group is now working towards addressing the
local inquiry scheduled for November 2009. A decision is not
expected until mid-2010.
Oliver Whitehead, Chairman of Minerva plc said:
“Over the last year, the Group has achieved key milestones; in
terms of planning and loan refinancing. In the context of an
exceptionally tough economic environment, both for the UK economy
and real estate in particular, we are pleased to have successfully
concluded our bank negotiations. We now have no scheduled loan
maturities during both the current and the next financial year.”
Although market conditions remain challenging, the outlook for
prime real estate is starting to show signs of improvement. Our
high quality assets, coupled with restructured funding, place the
Group in a good position to take advantage of a recovery in the UK
real estate market. Notwithstanding this, we remain focused on
delivering, leasing and where appropriate, recycling some of our
non-core properties to provide the Group with additional financial
flexibility.”
All Enquiries:
Minerva plc 020 7535 1000
Salmaan Hasan, Chief Executive
Ivan Ezekiel, Finance Director
Tim Garnham, Group Development Director
Brunswick Group LLP 020 7404 5959
Simon Sporborg/Tom Williams/Oliver Hughes
CHAIRMAN’S STATEMENT
While wider economic events and their consequence on the real
estate market inevitably affected Minerva’s financial results for
the year, the steady progress of our projects, coupled with the
restructuring of our funding to reflect the prevailing economic
environment, underlines our commitment to deliver long term value
to shareholders.
Operational progress
In February of this year, your Board reported that discussions had
commenced with our long-term relationship banks regarding the
amendment of terms to remove restrictive financial loan covenants.
I can report that, since the year end, we have concluded these
discussions and negotiated revised funding terms which are more
appropriate to the current market conditions and include the
removal or deferral of key financial loan covenants. In addition,
we have put in place a number of loan refinancings which extend the
loan maturities across the Group such that there are now no
scheduled loan maturities in both the current and the next
financial year. This is described in more detail in the Business
review.
With project finance securely in place, construction continues to
progress well on our City of London office projects at The Walbrook
and St Botolphs, and at the Lancaster Gate high-end residential
development in the West End of London. A detailed update on each of
these projects is set out in the Business review.
During the year, we concluded the Section 106 agreement for Odeon
Kensington with the Royal Borough of Kensington and Chelsea, which
formally granted planning permission for this landmark development
located in one of London’s premier residential districts.
In December 2008 the planning committee of Wandsworth Council
resolved to grant planning consent for over one million sq.ft. of
residential and commercial accommodation at the Ram Brewery,
Wandsworth. Even though this scheme received considerable support
throughout the planning process, in February 2009, the Secretary of
State decided to call in the decision for a local inquiry, which we
are at present addressing ahead of the inquiry scheduled for
November. A decision from the Secretary of State is not expected
until mid-2010.
Financial results
In common with others in the property industry, the deterioration
in the real estate and financial markets over the last year has had
a consequential effect on the value of our property portfolio and
the revaluation of our interest rate hedges in what is now a low
interest rate environment.
The results are considered in more detail in the Business review
but, in summary show a loss for the financial year, after
investment property revaluation movements and taxation, of £287.1
million (2008: £231.9 million). Basic net liability per share at 30
June 2009 was 28.8 pence (30 June 2008: net assets per share of
187.7 pence). Diluted EPRA net asset value per share, incorporating
the Group’s share of the valuation surplus on our trading
properties before taxation and adding back the fair value deficit
on our financial instruments, was 47.1 pence (30 June 2008: 239.8
pence).
The Board and management
I would like to thank the management and employees of the Company
who have worked tirelessly in this difficult and challenging
economic environment.
As announced in March, John McNeil stepped down as Non-executive
Director from the Board and I would also like to thank him for his
contribution.
Outlook
Over the last two years, property values have fallen sharply as a
result of the prevailing economic conditions and, in particular,
the scarcity of funding. There has however been recent evidence
that the demand for prime real estate in the UK is improving and
investment yields hardening. The Company has concluded some very
significant bank negotiations and refinancings over recent months
and has achieved key milestones on its development programme. We
are confident that leasing progress at our developments will place
the Group in a good position to benefit from an improvement in
market conditions.
Oliver Whitehead
Chairman
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