Secure Property Development & Investment : – RNS Interim 2020 Results

Secure Property Development & Invest PLC/ Index: AIM / Epic: SPDI / Sector: Real Estate

30 October 2020

Secure Property Development & Investment PLC ('SPDI' or the 'Company')

Half Year Report

Secure Property Development & Investment PLC, the AIM quoted South Eastern European focused property company, is pleased to announce its unaudited half year report for the period ended 30 June 2020.

As announced on 30 September 2020, the Company was granted by AIM Regulation a one-month extension to the date by which it is required under AIM Rule 18 to publish its interim accounts for the six months ended 30 June 2020. Accordingly, the Company is required to announce its half year report before 31 October 2020.

Financial Overview

Outbreak of COVID-19 pandemic has brought barriers to the successful completion of negotiations with Arcona Property Fund N.V ('Arcona')

• EBITDA decreased to €0,18m compared to €0,47m in H1 2019 as a result of operating income reduction related to the sale of the Greek logistics park
• Net finance costs reduced by 56% to €0,24m
• Operating result after finance and tax expenses increased by 8% to €0,081m loss from €0,088m loss in H1 2019
• Romania has now become the single operating income source of the Company

Corporate Overview

Company maintains strategy to maximise value for shareholders through continued discussions with regards to SPDI's property portfolio

• Following the completion of Stage 1 of the Arcona transaction (the 'Transaction') in 2019, involving two land plots in Ukraine and a residential and land asset in Bulgaria, the Company received a total of 595.534 Arcona shares and 144.264 warrants over Arcona shares
• Discussions with Arcona for the completion of Stage 2 of the Transaction are progressing slowly during the COVID-19 pandemic and enforced lockdowns, SPDI expects activity to

pick up as measures put in place to combat COVID-19 in the various related jurisdictions (Holland, Czech Republic for Arcona, Romania, Cyprus and the UK) are eased

• Discussions regarding Stage 3 will follow the successful closing of Stage 2

Lambros G. Anagnostopoulos, Chief Executive Officer, said, "The majority of our income producing assets in Romania are let to blue chip tenants operating in defensive industries, such as the food and the telco sectors. As a result, to date our tenants and our income have experienced little to no disruption from the COVID-19crisis. Yet, the COVID-19associated lockdowns have caused delays to the Arcona Transaction process. We are continuing to work hard alongside Arcona to overcome such delays and progress the final steps of Stage 2 of the Transaction."

* * ENDS * *

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014

For further information please visit www.secure-property.euor contact:

Notes to Editors

Secure Property Development and Investment plc is an AIM listed property development and investment company focused on the South East European markets. The Company's strategy is focused on generating healthy investment returns principally derived from: the operation of income generating commercial properties and capital appreciation through investment in high yield real estate assets. The Company is focused primarily on commercial and industrial property in populous locations with blue chip tenants on long term rental contracts. The Company's senior management consists of a team of executives that possess extensive experience in managing real estate companies both in the private and the publicly listed sector, in various European countries.

1. Management Report

1.1 Corporate Overview and Financial Performance

SPDI's core property asset portfolio currently consists of South Eastern European prime commercial and industrial real estate, the majority of which is let to blue chip tenants on long leases.

During 2020, management in line with Company's strategy to maximise value for shareholders, continued the discussions with Arcona Property Fund N.V (Arcona) in relation to the conditional implementation agreement for the sale of Company's property portfolio, excluding its Greek logistics property (which has now also separately been sold), in an all-share transaction to Arcona, an Amsterdam and Prague listed company that invests in commercial property in Central Europe. Arcona currently holds high yielding real estate investments in Czech Republic, Poland and Slovakia, with the transaction valueing the SPDI assets NAV at ~ €29m, significantly higher than the current market value of the Company as a whole. If one takes into consideration and assumes the warrants that will be issued together with the ARCONA shares, the transaction values the SPDI assets at their Net Asset Value.

Following the completion of Stage 1 of the transaction in 2019, which involved two land plots in Ukraine and residential and land asset in Bulgaria and resulted in Company receiving a total of 595.534 Arcona shares and 144.264 warrants over Arcona shares, during the current period the two parties engaged in negotiating and planning Stage 2 of the aforementioned transaction. This Stage is centred on the sale of two commercial income producing assets in Romania and three land plots in Ukraine. The combination of the two complimentary asset portfolios is expected to create a significant European Property company, benefiting both the Company's and the buyer's respective shareholders. However, the rapid development of COVID-19 outbreak and its effects on all related countries and therefore on all participants in this process, have caused major delays. Lockdowns, travel restrictions, remote working and other similar measures, have affected the effective completion of all relevant actions and therefore brought barriers to the successful completion of the negotiations. Both parties are currently trying to overcome all issues and continue towards completion of this part of the transaction.

The table below presents the operating performance for H1 2020 compared to H1 2019. EBITDA reached €0,18m compared to €0,47m in H1 2019, net finance costs reduced by 56% to €0,24m, and operating result after finance and tax expenses increased by 8% to -€0,080m from -€0,088m in H1 2019. Romania has now become the single operating income source of the Company.

This is an excerpt of the original content. To continue reading it, access the original document here.