Ace Liberty & Stone - Half-year Report

Ace Liberty and Stone plc

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

INTERIM RESULTS FOR SIX MONTHS TO 31 OCTOBER 2022

Ace Liberty and Stone Plc (AQSE: ALSP), 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 2022 to 31 October 2022. 

Highlights*:

·      Pre-tax profit decreased marginally by 3% to £731,383 (H1 2022) from £754,911 (H1 2021)

·      Rental income slightly reduced by 6% down from £2,887,723 (H1 2021) to £2,700,031 (H1 2022)

•      Open Offer and re-finance provide cash resources of £9.5m for investment in UK commercial property

•      Contracts exchanged for the Dorchester property.

*Note: Full details can be found in the Chairman's statement

Ismail Ghandour, Chief Executive Officer, commented:

"The half year shows a stable operating position and ends with the Group poised for expansion."

Chairman's statement

I am pleased to announce the Company's interim results for the half year ended 31 October 2022. Turnover at £2,700,031 for the half year is down by 6.5% on the comparable value for the previous year of £2,887,723 as a result of properties sold in the year ended 30 April 2022 and commented upon in those results. The results show a one-off increase in administrative expenses, and income from dilapidations in respect of the Fawcett House, Sunderland property; no adjustments have been considered necessary to the values of investment property assets.

Discussions have continued with Sunderland City Council on the future re-development of Fawcett House. A cost of £184,000 has been recorded in the period for rates charges on empty portion of that property (approximately £130,000 relating to a previous period), contributing to the increase in administrative expenses. Measures have been put in place to mitigate this expense for the future.

Contracts have been exchanged for the purchase of Loders Service Station, Dorchester at a cost of £2,080,000 and completion is expected shortly. The property yields a rental income of £167,914 initially, with substantial increases embedded in its fifteen-year unexpired lease.

The Company is proceeding to completion of the acquisition of the property at Unit M, 9 Hunters Row, Stafford.

Several other purchases are under consideration and acquisitions will be made when advantageous to the Company in the current unsettled economic circumstances.

The Company has continued with its programme of management changes. Mark Thomas, Commercial Director, who has been a director of the Company since its formation has resigned to pursue his other interests. His role has been assumed by Nick Jones, Property Director designate, who joined Ace in January 2022. I thank Mark for his hard work in helping to establish Ace and wish Nick well for his future role.

There have also been changes within the staffing of the Finance department, including a period of Maternity Leave for an employee.

These actions have driven an increase in salary costs of £115,000, which are mainly non-recurring, included in Administration Expenses during the period.

The re-finance of the Group's secured loan facility by Coutts & Co was satisfactorily concluded during the period and all obligations to Lloyds Banking Group were satisfactorily settled.

On 21 October, the Company announced an Open Offer of one share at nominal value for every four held at the record date. The offer closed on 30 November and raised £3,074,653 represented by the issue of 12,298,612 new ordinary shares of 25p. The new shares were admitted to trading on 14 December. These funds, together with the cash balances available at period end, leave Ace with approximately £9.5 million available for investment opportunities.

As a result of the re-finance and the Open Offer, the Company currently has cash resources of approximately £9.5m to invest in UK freehold and long leasehold commercial properties according to its existing policies.

Surplus funds will be invested short term with UK deposit takers regulated by the Bank of England.

There has been no change in the status of the £4.2m placed with LiBank s.a.l.

On 21 October the Company paid a dividend of 3.4p per share to mark its intention to resume shareholder distributions after the pause dictated by the impact of the Covid-19 pandemic. The previous payment had been 13 November 2019.

The following statistics are key to the Company's activities at 31 October 2022:

a)     Portfolio Loan to Value is 55% (H1 2021: 50%)

b)    Weighted Average Unexpired Lease to Break is 6.52 years (H1 2021: 7.03 years)

c)     47% of tenants are government bodies (H1 2021: 57%); 51% are triple-A commercial (H1 2021:42%)

The directors believe the Group is well positioned to thrive whatever the UK economy may have in store.

Unaudited group statement of comprehensive income

for the six months ended 31 October 2022

  *Unaudited