TIDMTOWN
RNS Number : 2814J
Town Centre Securities PLC
09 April 2020
9 April 2020
Town Centre Securities PLC
('The Company' or 'TCS')
COVID-19 Update
Town Centre Securities Plc today provides an update on the
impact of COVID-19 on its business.
The health and well-being of our staff and stakeholders is of
paramount importance. Since the outbreak of the virus we have been
following the latest official government guidelines and advice
across our portfolio, and the vast majority of staff are working
from home.
Ongoing liquidity of the business remains a key focus:
-- As at close of business 31 March 2020 TCS had cash at bank
plus borrowing headroom of GBP23.9m.
-- This headroom is based on our asset valuations as at 31
December 2019. We have a GBP106m debenture in place until 2031, and
three bank RCF facilities falling due between April 2021 and June
2023.
-- We have strong and longstanding relationships with our
banking partners and continue to be in regular dialogue with
them.
-- The Group's three asset backed RCF loan facilities, and the
debenture, each have covenants in respect of minimum interest cover
ratios that are tested quarterly for the banks and annually for the
debenture. At the most recent test date, in January 2020 for the
banks, headroom on the respective covenants ranged between 443% and
635% compared to a covenant requirement of 175%; thus a drop in
income of between 60% and 72% in any quarter would result in a
breach of covenants.
-- The Debenture test is an annual one with a covenant
requirement of 100% income cover over the year. At the last test in
June 2019 the cover was 210%; therefore a drop in income of over
50% for twelve months would result in a covenant breach.
Our main priority is the management and preservation of
cash:
Tenants:
-- We are in detailed and on-going discussions with our tenants.
-- For the rent quarters commencing 25 March and 1 April TCS
billed GBP4.9m of rent and service charge. As at 8 April we have
collected GBP3.5m or 71%, with a further GBP0.7m or 15% of payments
that we have agreed to defer, totalling GBP4.2m or 86% of the
amounts due.
-- This compares to over 90% in more normal circumstances at this stage.
-- We continue to work with remaining tenants to agree payment
plans. Many of these tenants are awaiting receipt of government
support which we hope will, to some degree, unlock further
payments.
-- Our next key quarter date in May relates to our Scottish
properties where we will bill c. GBP0.7m of rent and service charge
costs.
The business:
-- We are furloughing staff across our property, car park and hotel businesses.
-- The Board has agreed to a 20% salary reduction for three months.
-- We are in the process of agreeing further cost saving initiatives.
-- We have deferred VAT payments and other taxes due to HMRC.
-- We have paused all capital projects at this time, with the
exception of The Cube in Leeds where work is continuing and we are
closely monitoring the situation with the contractor.
From an operational and community perspective:
-- 49% of our portfolio is let to retail and leisure tenants of
which approximately one third of those properties are currently
open and trading to some extent.
-- The Merrion Estate, which makes up more than 40% of our
portfolio has one third of its retail and leisure tenants operating
including key outlets such as Morrisons, Iceland and Boots. In
addition, the ibis Styles hotel and the CitiPark car park are also
operating.
-- CitiPark performance has been hit hardest and since the
lockdown we are seeing a substantial reduction in usage and income
of our car parks. We are working hard to reduce costs, and have
currently closed seven branches.
-- We are currently supporting essential services and workers,
and are actively engaged in the community, particularly in Leeds.
Our ibis Styles hotel is the only hotel open in the city and we are
supporting the accommodation needs of key workers. In addition; we
are providing free parking in a number of our CitiPark branches for
NHS workers.
Guidance and dividend:
-- Overall it is too early to quantify the impact of COVID-19 on
the business; as a result we are suspending all previous guidance
on performance at this time.
-- The Board have discussed dividend policy, noting the interim
dividend of 3.25p per share totalling GBP1.7m in cash (declared in
February) which is due for payment in June 2020. No decision
regarding dividend payment has been made at this time, but the
Board will continue to review the affordability and appropriateness
of such payments.
Edward Ziff, Chairman and Chief Executive commented:
"These are unprecedented times and we are working tirelessly to
support all of our stakeholders whilst doing everything possible to
manage the business through this challenging period. I am
encouraged by the level of rent received for the current quarter
and want to thank our tenants for working with us. TCS has proven
to be a conservative and resilient business over its sixty-year
history, and I believe that continues to be the case.
"We welcome the measures the Government is putting in place to
support the business community, and hope that the business rates
relief given to retail and leisure operators will be extended to
car park operators such as TCS, all of whom are being impacted by
the lockdown.
"We will continue to update the market as and when
appropriate."
-Ends-
For further information, please contact:
Town Centre Securities PLC www.tcs-plc.co.uk / @TCS PLC
Edward Ziff, Chairman and Chief Executive 0113 222 1234
Mark Dilley, Group Finance Director
MHP Communications 0203 128 8742
Reg Hoare / Alastair de Kare-Silver / Florence Mayo
tcs@mhpc.com
Notes to Editors:
Town Centre Securities PLC (TCS) is a Leeds, Manchester, Glasgow
and London based property investment and car parking operator with
assets of over GBP394m. With 60 years' experience, a commitment to
sustainable development and a reputation for quality and
innovation, TCS create mixed use developments close to transport
hubs in major cities across the UK. Their current portfolio
delivers an annual income of more than GBP31m.
For more information visit www.tcs-plc.co.uk
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END
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