01 August 2014

Urban&Civic plc

("Urban&Civic" or the "Company")

INTERIM MANAGEMENT STATEMENT FOR THE PERIOD TO 31st JULY 2014

Urban&Civic is pleased to announce its first interim management statement as the enlarged business, and reports good progress on all its developments against the backdrop of a strong market.

Nigel Hugill, Chairman of Urban&Civic, said: "I am pleased to be able to report good advancements: relatively small steps but all very much in the right direction and, in certain instances, ahead of our reasonable expectations on listing in May.

"The integration of the two businesses has progressed well, and the benefits of joining management teams with complementary skill sets have become clearly evident, most especially in combined project management on our strategic sites where infrastructure spend is beginning to accelerate. Our markets remain strong and our expectations for the full year are unchanged."

Alconbury

A series of Government initiatives have recently been announced which will serve to strengthen further momentum within the Alconbury Enterprise Zone.

Growth funding of £5 million for "nuts and bolts" infrastructure has been secured as grant and will be invested in additional commercial enabling works, substantially over the next six months.  The cost of those works (but not the benefit of the grant) were included by CBRE in its property valuation report in the prospectus.

Confirmation has also been received that two officially backed technical testing and training facilities (including part of the Huntingdonshire Regional College) are to move to Alconbury under the auspices of the Growth Fund, thereby creating new centres of excellence for the Cambridgeshire region. Separate from the expansion in on-site education, official estimates are for more than 500 resulting new jobs over 10 years, as part of the emerging technical cluster at Alconbury. The combined value of the announced investment, including from European Community sources, is likely to be approximately £30 million.

Commercial

We were able to take rapid advantage of an increasingly strong investment market for business parks to complete a first sale in the enlarged business. In early July we disposed of a priority joint venture interest in the Quantum office complex at Maidenhead in Berkshire, on an initial yield of 6.7 per cent. Net cash receipt to the Company, after repayment of bank debt, was £3.7 million. The value of the investment had been written down previously to zero in the Terrace Hill accounts.

Construction is about to commence on a 125,000 sq ft store in Middlesbrough let to Sainsbury's with ancillary Marston's, KFC and Costa Coffee units: aggregate contracted income is approximately £2.5 million per annum. Forward funding arrangements are well advanced and, are expected to complete before the 30 September financial period end.

The first of three student housing towers in Southampton has been handed over to the University and the remaining two are scheduled for next month, in accordance with the existing arrangements with Legal & General. The bulk of the profit was recognised in Terrace Hill's pre-acquisition accounts but cash receipts on final handover will be of the order of £9 million.

Residential

Additional preparatory works are being undertaken for Key Phase One residential at Alconbury, with the first serviced plots being available in Spring of 2015, in accordance with the timetable outlined at the time of listing. At Rugby the first plots remain scheduled for Autumn 2015. The Rugby timetable is dictated by a convention that newt licence applications are only considered by Natural England once all reserved matters are discharged. Rugby has been selected as one of a number of projects to help lead an efficiency drive amongst Government Agencies for which Cabinet Office and we are not anticipating timing slippage against listing indications.

Local rates of housing sales in the respective vicinities of Alconbury and Rugby are strong and reflected in escalating new build pricing, with achieved levels well above our December 2013 valuation assumptions. Full external revaluations will be commissioned for the forthcoming September 2014 accounts.

Development

At Bristol, we received planning consent for an additional two floors at a vacant waterside office block for which we have gained change of use consent. Construction on the residential conversion into 59 high-specification apartments will start shortly. Joint selling agents have been appointed and current GDV is estimated at £14.1 million on assumed average sales receipts of £325 per sq ft.

A town centre hotel and leisure development in Darlington centred around a new nine screen cinema will also start on site in September. Total projected spend is £19 million, providing a yield on cost of around 7.5 per cent. A similar sized and configured scheme (albeit without the hotel) is also being progressed in Burnley, again on local authority owned land that will be transferred on a long lease. Unlike foodstores, the intention is to hold town centre developments for investment and prospectively reversionary income.

Office letting

A 15 year lease to Dong Energy has been signed on 80,000 sq ft at Howick Place in Victoria, developed jointly with Doughty Hanson, in which the group has a 6% interest. Six out of eight commercial floors are now let and there is good interest in the remainder.

Financial position

The group raised £161 million net of expenses on the placing in late May 2014. The group also included a pro-forma balance sheet showing the effect of the placing and acquisition of Terrace Hill within the interim statement that was published at the end of May. Since then the financial position of the group has not materially changed with net assets remaining at approximately £315 million. This excludes the effect of valuation movements which will be reflected in our period end accounts at September 2014, which will also reflect the results of assessing the fair value of the net assets of Terrace Hill.

ENQUIRIES:

Urban&Civic plc

Nigel Hugill, Executive Chairman

Jon Austen, Group Finance Director

Tel: +44 (0)20 7569 1600

FTI Consulting

Stephanie Highett

Nick Taylor

Tel: +44 (0)20 3727 1000


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