Ace Liberty & Stone - Half-year Report

Ace Liberty and Stone plc

(''Ace'' or "the Company'')

INTERIM RESULTS FOR SIX MONTHS TO 31 OCTOBER 2021

Ace Liberty and Stone plc, the active property investment company, capitalising on commercial property investment opportunities across the UK, is delighted to announce Interim Results for the period from 1 May 2021 to 31 October 2021. 

Highlights:

·      Pre-tax profit increased by 12.1% to £754,911 (H1 2021) from £673,511 (H1 2020)

·      Rental income slightly reduced by 3.3% in a difficult trading period. Down from £2,985,965 (H1 2020) to £2,887,723 (H1 2021)

•      Rent deferrals granted to four main tenants in the leisure industry have now been collected in full.

•      Three properties sold since 30 April 2021 to achieve a profit of £2,800,000 over purchase price.

Ismail Ghandour, Chief Executive Officer, commented:

"At a time when property valuations are under pressure from valuers, Ace has sold three properties for a profit of £2.8m - a profit of nearly 35% on original cost."

Chairman's statement

I am pleased to announce the Company's interim results for the half year ended 31 October 2021. The Company has performed strongly in very difficult circumstances. Turnover at £2,887,723 for the half year is down by 3.3% on the comparable value for the previous year of £2,985,965. A number of factors impact on this, notably the sales and acquisitions of properties and the CVA protection sought by a tenant which temporarily reduced the rent payable. Total comprehensive income for the period is £741,673 compared to the result of £590,739 in the prior interim period, an increase of 25.6%.

During the period under review Ace completed the sales of Hillcrest House, Leeds and Bridge House, Dudley. The former was sold for £2,300,000 against a purchase price in November 2013 of £1,450,000 and the latter for £5,100,000 against a purchase price in April 2015 of £4,100,000. Subsequent to the balance sheet date, the Company completed the sale of Willow and Holly Court, Plymouth, which cost £3,500,000 in April 2016, for £4,450,000. The directors seek to maintain a prudent balance between profiting on property sales and maintaining a consistent income stream. These three sales realise a total profit of £2,800,000 on assets costing £9,050,000. As opportunities arise, the directors will consider making further selective sales to unlock the value in the balance sheet.

The purchasers of Hillcrest House and Bridge House elected to acquire the share capital of the subsidiary company owning each asset and this impacts the entries shown on the statement of comprehensive income. The properties have been valued at sale price in previous balance sheets and shown as assets held for sale.

The directors have prudently made a small revaluation of £100,000 loss against Willow House, Aldershot to reflect market conditions.

The Company has weathered the economic effects of the Covid pandemic in good shape. Four major tenants in the leisure industry were forced to stop or curtail their business activities and negotiated deferrals of some of their rent liabilities. In the period since the balance sheet date, all have been brought up to date with no write-offs. Some of the smaller businesses in the Sunderland and Margate properties have been slow to make up their arrears.

The loan facility advanced by Lloyds Banking Group in 2016 reached maturity in November 2021 and has been temporarily rolled over while a new facility is put in place. Discussions in this respect are ongoing but proceeding well. The loan currently stands at £15,586,931, secured on assets in the balance sheet at £40,637,866.

The following statistics are key to the Company's activities at 31 October 2021:

a)     Portfolio Loan to Value is 50% (H1 2020: 53%)

b)    Weighted Average Unexpired Lease to Break is 7.03 years (H1 2020: 6.94 years)

c)     57% of tenants are government bodies (H1 2020: 57%); 42% are triple-A commercial (H1 2020:42%)

The Company suspended dividend payments in January 2020 as a result of the uncertainties stemming from the effects of the Covid-19 virus. The directors keep this under constant review and will resume payments as soon as circumstances permit. The directors value the support given by the shareholders which improves the long term strength of the Company.

The directors believe that the Company's prospects are excellent. It has survived a period of unprecedented difficulty without serious harm. The portfolio is sound, producing a solid income and cash flow, and poised to benefit from improvements in the UK economy.

Unaudited group statement of comprehensive income

for the six months ended 31 October 2021

  *Unaudited