F&C ASSET MANAGEMENT Company announces plans to achieve UK REIT Status and a Placing Programme for up to
100 million Ordinary Shares
F&C UK Real Estate Investments Limited ('the Company') announced strong performance in its annual results for the year to 30 June 2014 which were released to the market today. The positive returns, combined with the issue of a significant number of new Ordinary Shares during the year, meant that the market capitalisation of the Company increased from £151 million (as at 30 June 2013) to £194 million (as at
30 June 2014).
In order to take advantage of the prevailing market conditions and investment opportunities identified by the Investment Manager, the Board is proposing to raise additional share capital through a Placing Programme of up to 100 million new Ordinary Shares. Initially the Board is proposing to issue new Ordinary Shares pursuant to the shareholder authority to allot up to 23,085,500 new Ordinary Shares (being approximately 10 per cent of the current issued share capital) being sought at the Annual General Meeting.
The Company also announced that it was proposing to take the necessary steps to achieve UK-REIT status. A separate Circular, outlining this proposal in more detail and convening an extraordinary general meeting will be sent to shareholders in the near future.
The Company's net asset value ('NAV') total return for the year was 23.9 per cent and the share price total return was 23.2 per cent. This compares to a return from the Investment Property Databank ('IPD') Quarterly Funds Index of 16.7 per cent. The shares were trading at a premium to the NAV of 0.7 per cent at the year end.
Three interim dividends of 1.25 pence per share were paid during the year, with a fourth interim dividend of
1.25 per cent paid on 30 September 2014. This gives a total dividend for the year ended 30 June 2014 of 5.0 pence per share, a yield of 6.0 per cent on the year end share price. In the absence of unforeseen circumstances, it is the intention to continue to pay quarterly interim dividends at this rate.
The portfolio delivered an ungeared total return of 14.9 per cent, including an income return of 6.9 per cent over the year. Properties in the industrial sector witnessed the highest returns at 19.2 per cent, followed by offices which returned 16.8 per cent.
The Company used the proceeds from the issue of new equity together with property sales to purchase two new retail warehouses and a South East office investment. The Company has continued with the strategy of selling the smaller lot size properties and those where future returns look compromised. Over the year to 30
June, the Company sold five properties with an aggregate value of £16.05 million (excluding costs).
The Company's net gearing level, as at 30 June 2014 was 31.7 per cent. The Company has experienced continued market demand for its shares and has issued 22.8 million Ordinary Shares during the year at a premium to the published net asset value at the time of each issuance, raising proceeds of £18.2 million.
Commenting on the outlook for the UK Commercial Property sector, fund manager Ian McBryde said:
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"Investor sentiment has improved in the wake of a stronger UK economic performance and an easing of fears about debt markets in Europe. The major uncertainty would appear to be the timing and extent of an upturn in UK interest rates and its impact on the wider economy and property yields. While there are downside risks both in the UK and from abroad, if the economy performs in line with consensus expectations, the property market is predicted to deliver sustained positive total returns. The recent level of total returns may be exceptional, and we would expect some moderation to occur with the income component showing greater prominence over time."
Share price total return of 23.2 per cent
Portfolio ungeared total return of 14.9 per cent
Net asset value per share total return of 23.9 per cent
Net asset value per share total return since launch* of 77.2per cent
Dividend of 5.0 pence per share
About F&C UK Real Estate Investments Limited: The Company's investment objective is to provide ordinary shareholders with an attractive level of income together with the potential for capital and income growth from investing in a diversified UK commercial property portfolio
The Company was previously named IRP Property Investments Limited. On April 11 2013, enlarged by the acquisition of the ISIS Property Trust, the Trust was renamed F&C UK Real Estate Investment Limited
F&C UK Real Estate Investments Limited is managed by Ian McBryde at F&C REIT in London
The Company is benchmarked against the Investment Property Databank ('IPD') Quarterly Index
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*Launch date: 1 June 2004
F&C is focused exclusively on managing money for its clients. It manages assets for a combination of insurance clients, institutional investors, intermediaries and private individuals. F&C invests across all major asset classes - equities, fixed income and property - and has specialist expertise in asset allocation, alternative investments, liability driven investments, multi-manager, private equity funds and Environmental Social and Governance (ESG) Investing. The F&C Group includes F&C REIT, a global real estate asset manager.
F&C has a strong footprint in the U.K. and the rest of Europe with assets under management of approximately £83 billion as at 30 June 2014. F&C has a rich heritage that dates back almost 150 years and can be traced back to the founding in 1868 of the Foreign & Colonial Investment Trust.
F&C is part of Bank of Montreal (BMO) Global Asset Management, a global investment manager with more than US$280 billion in assets under management as of 31 July 2014. BMO Global Asset Management is a part of BMO Financial Group (NYSE:BMO), a fully diversified financial services organisation with US$531 billion total assets and more than 45,000 employees as of April 30, 2014.
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F&C REIT is an entrepreneurial, institutionally-partnered force in commercial property and manages a global portfolio worth £6.9 billion* on behalf of a wide range of individuals, professional investors, property trusts and institutional clients.
F&C REIT's investment team uses both detailed proprietary and external research, sophisticated forecasting and strategic analysis to find market inefficiencies and opportunities - across property sectors, countries, types and tenants.
F&C REIT offers a comprehensive, integrated range of real estate fund management services with a network of offices spanned across four countries: Germany (Munich), India (Mumbai), Ireland (Dublin), and the UK (London).
* As at 31.12.2013. Some assets under management are recorded at their acquisition cost, reflecting the basis on which income is generated for F&C REIT by these assets.
Disclaimer
Past performance should not be seen as an indication of future performance. The value of investments and income derived from them can go down as well as up as a result of market or currency movements and investors may not get back the original amount invested. The information, opinions estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time. F&C Group Companies may from time to time deal in investments mentioned herein on behalf of their clients. The source of information in all graphs is F&C unless otherwise stated. F&C Management Limited is authorised and regulated by the Financial Conduct Authority FRN: 119230 F&C Management Limited is a member of the F&C Group. The F&C Group is wholly owned by BMO Global Asset Management (Europe) Limited, which is itself a wholly owned subsidiary of the Bank of Montreal. F&C, the F&C logo, REO and the 'reo' logo are registered trademarks of F&C Asset Management plc. F&C Investments and the F&C Investments logo are trademarks of F&C Management Limited. © Copyright F&C Management Limited 2014. All Rights Reserved. Neither this document nor any part of it may be reproduced by any party whether by photocopying or storing in any medium by electronic means or otherwise without the prior approval of F&C Management Limited.
F&C Management Ltd accepts no liability in respect of the information or any views expressed herein which may be subject to change without notice at any time.
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