TIDMSTOB
RNS Number : 6574V
Stobart Group Limited
17 January 2012
17 January 2012
Stobart Group Limited
("Stobart" or "the Group")
Stobart Estates to acquire 18 freehold and long leasehold
properties known as the 'Moneypenny' portfolio for GBP12.35m (the
"Acquisition")
Group trading in line with full year expectations
Stobart Estates, a division of Stobart Group, through its wholly
owned subsidiary Hamsard 3213 Limited, announces that it has
entered into a conditional agreement with W.A. Developments
International ("the vendor") to acquire the entire issued share
capital of WADI Properties Limited ("WADI Properties") for a total
consideration of GBP12.35m.
Stobart Group also reaffirms that it expects to meet current
full year expectations for the year to 29 February 2012.
Key points:
-- Stobart Estates has conditionally agreed to acquire the
entire issued share capital of WADI Properties Limited ("WADI
Properties") from the vendor for GBP12.35m. WADI Properties is the
holding company of 18 freehold and long leasehold properties -
known as the 'Moneypenny' portfolio. This is an acquisition
outlined at the time of last year's Placing.
-- The consideration is GBP5.15m in cash with the remaining
GBP7.20m to be satisfied through the issue to the vendor of new
Stobart Ordinary Shares on completion, based on the average middle
market closing price for a Stobart ordinary share on the five
business days prior to completion.
-- The total enterprise value for the Acquisition is GBP101.2m,
excluding the banking facility fee of GBP2.8m. The Directors
believe the fair value of the assets and liabilities of the
acquired business will be in excess of the price to be paid.
-- The portfolio, which comprises a mix of UK industrial,
commercial, retail and residential properties, has been valued by
Knight Frank, in accordance with The RICS Valuation Standards ("The
Red Book"), to have a gross market value of GBP98.93m as at 30
November 2011.
-- The Properties are currently divided into 56 lettable areas,
2 of which the Group occupies and 6 are currently vacant. The
majority of the properties are located in the South East.
-- WADI Properties has net debt of GBP88.85m. Of the net debt,
GBP74.9m is at the fixed rate of 5% with the balance at a floating
rate of 1% over 3-month LIBOR. The banking facility will continue
in place following completion and has a maturity date of April
2017. The acquisition is conditional on the completion of
amendments to the facilities agreements on terms satisfactory to
Stobart.
-- The fixed assets which are the subject of the transaction
were, at 31 August 2011, (being the WADI Properties year end date)
GBP106.1m and the gross assets were GBP108.9m. The transaction will
increase profit before taxation by GBP2.3m per annum, enhance the
Group's earnings per share and generate free cash flow in excess of
GBP2.0m per annum, net of interest and other costs.
-- The portfolio is anticipated to generate a return in excess
of 10% per annum, including a forecast investment in certain of the
properties of up to GBP13.5m. There are also likely to be
significant potential tax losses available for use if gains are
made on disposals of all or some of the properties.
-- The vendor is a company controlled by Stobart's CEO and main
board director, Andrew Tinkler, and COO, William Stobart. Andrew
Tinkler is also a substantial shareholder in Stobart. Ben Whawell,
Stobart's Finance Director and main board director, and Richard
Butcher, Deputy CEO and CEO of Stobart Estates, are also directors
of the vendor and WADI Properties. Ben Whawell, along with Andrew
Tinkler, did not participate in the board decision to proceed with
the proposed transaction.
-- The Acquisition is considered to be a related party
transaction. Consequently, the Acquisition is conditional on the
approval of Stobart shareholders. Further details of the
Acquisition and a notice convening a general meeting, inter alia,
to approve the Acquisition will be sent to Stobart shareholders
shortly.
-- This proposed investment of GBP12.35m continues the
implementation of the Group's strategy to deploy the GBP119.90m
raised in last year's Placing to support growth across its five
divisions.
-- In trading, overall the Group expects to meet expectations
with some Divisions performing ahead and some slightly below
expectations.
The board remains confident of delivering the strategic plan and
in the medium and long term future of the Group. The full trading
update is shown below.
Rodney Baker-Bates, non-executive Chairman of Stobart,
commented:
"This portfolio will both diversify and strengthen our existing
property portfolio. We have the management capability within the
Group to improve both the income and capital performance. It will
provide positive cash flow, gives a return above our current cost
of capital, and offers substantial capital upside potential.
The transaction brings with it an attractive fixed rate debt
package which will benefit the whole Group up to 2017, as well as
potential tax advantages given the current mix of earnings and
assets."
Paul Orchard-Lisle, a non-executive director of Stobart and
Chairman of Stobart Estates, added:
"We know the Moneypenny portfolio intimately and we are
satisfied that apart from the attractive income stream, there are
significant opportunities where astute asset management and
development expertise should deliver very worthwhile capital
gains."
Enquiries:
Stobart Group
Rodney Baker-Bates, Non-Executive Tel: +44 1925 605400
Chairman
i-nfluence Tel: +44 207 287
Stuart Dyble/James Andrew 9610
Square1 Consulting
David Bick/Mark Longson Tel: + 44 207 929
5599
Investec
Patrick Robb/Rowena Murray
Tel: + 44 207 597
4000
Trading Update
Overall to date the Group is trading in line with current
expectations for the full year to 29 February 2012 with some
divisions performing ahead and some slightly below
expectations.
The recently implemented new divisional structure is working
well.
Transport and Distribution operates within a challenging
economic environment but the ambient transport operations are
largely restructured and improved and have progressed well in the
second half of the year. These operations are in a strong position
for the new financial year. The focus is now on restructuring and
improving the chilled and warehousing operations which are
performing below the prior year. The restructuring will result in a
more efficient operation to take advantage of future market
opportunities. Rail freight is performing well with the Valencia
service recommencing. The new rail operation at Tesco Grocery in
Daventry for up to eight trains a day is fully operational.
Stobart Estates has a number of on-going property initiatives
including the proposed purchase of the Moneypenny portfolio. We
expect to deliver at least one realisation before the year end.
Civil engineering and infrastructure management is performing as
expected and supporting Group development projects.
In the Air division we look forward to opening the new London
Southend airport operation on 28 February with the first easyJet
flights commencing at the start of April.
The Biomass division is exporting significant volumes which
continue to build and a number of UK supply contracts are under
negotiation.
The board remains confident on delivering the strategic plan and
in the medium and long term future of the Group.
Further information:
None of Andrew Tinkler, William Stobart, Ben Whawell or Richard
Butcher will vote on the resolution in relation to the Acquisition
to be proposed at the General Meeting. These Individuals have also
undertaken to take all reasonable steps to ensure their respective
associates will not vote on the relevant resolution.
The Independent Directors, having been so advised by Investec,
consider the proposed Acquisition fair and reasonable and in the
best interests of Stobart and shareholders as a whole.
A resolution to authorise the Directors to make on market
purchases of Ordinary Shares to buy-back up to 10 per cent of the
Ordinary Shares in issue will also be proposed at the forthcoming
General Meeting.
The Independent Directors unanimously recommend Shareholders to
vote in favour of the resolutions. The Independent Directors intend
to vote in favour of both the Acquisition and the buy-back
authority.
The Acquisition agreement is conditional upon the passing of the
relevant resolution at the General Meeting and completion of
amendments to the banking agreements on terms satisfactory to
Stobart.
If that resolution is not passed the Acquisition will not
complete and will terminate.
ends
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCDBGDBDSBBGDL
Grafico Azioni Esken (LSE:ESKN)
Storico
Da Set 2024 a Ott 2024
Grafico Azioni Esken (LSE:ESKN)
Storico
Da Ott 2023 a Ott 2024