Trading Update
Posted on April 9, 2020
Glenstone Property PLC Trading Update
Introduction
Our priority at this time of unprecedented disruption is the health of our staff, tenants and stakeholders. Our strategy to create a fully diversified REIT is proving correct. Over the last few years the company has invested heavily in IT systems which are working well and enable real-time financial forecasting on each our 500 + tenants. Over the last few years we have built up a strong relationship with our tenants, banks, advisors and suppliers and this is proving beneficial in this difficult period.
Financial position
Our rental income is received quarterly or monthly;
- 53% of the portfolio is on quarterly rents paid in advance. 61% of this rental income has been received for the quarter ending 23 June 2020.
- 47% of the portfolio is on monthly rents (split 17 % residential income, 13% office income, 12% retail income and 5% industrial and leisure income). 59% of this rental income due for April has been received.
- We are confident that the majority of the monthly rental income this quarter will be received and we anticipate that circa 70% of our contracted rental income should be received for the period 25th March to 23th June 2020.
- The remaining 30% of income is from our tenants who have been forced to close by the COVID-19 restrictions. We are working with them and generally deferring rents to ensure that they can survive and continue to prosper when restrictions are lifted.
The cash position is follows:
- Over £1m of rental income has so far been received this quarter. This represents circa 60% of the rent due. This is likely to increase as the May and June monthly rental income is received from our 250 tenants who pay on this basis.
- Cash reserves and unutilised bank facilities are over £10.5m. Our bank facilities mature between 2024 -2028. Our gearing is circa 32%.
The company is looking at reducing operational expenditure and we are confident our operating costs will be reduced during the COVID-19 outbreak.
Dividend and outlook
At this stage we believe Earnings to 31 March 2020 will be largely unaffected by the crisis and will be in line with our projection. However, the RICS has issued a guidance note to valuers to include a Material Uncertainty Clause in their independent valuation and we expect this to apply to our end of year valuation.
When our annual Earnings to 31 March 2020 are available we should have a better understanding of the effect of the COVID-19 outbreak will have on the company. We will then consider whether a final dividend for the year ended 31 March 2020 is appropriate and if so how much it should be and when it should be paid.
The board believe the company is well positioned and remain confident in the long-term outlook especially if the lockdown is short term and the economy can return to normality quickly.
For further information please contact
Chris Powell – Chairman