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DJ Ace Liberty & Stone PLC Half-year Report

TIDMALSP

RNS Number : 3342O

Ace Liberty & Stone PLC

29 January 2019

29(th) January 2019

Ace Liberty and Stone plc

("Ace" or "the Company")

INTERIM RESULTS FOR SIX MONTHS TO 31 OCTOBER 2018

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 2018 to 31 October 2018.

Financial Highlights:

   --      Rental income for the half year is GBP1,945,848, an increase of 32% (2017: GBP1,472,190) 
   --      Rental income for the full year is set to exceed the 2018 achievement of GBP3,515,088. 

-- Profit from continuing operations for the current period is GBP270,782 representing an increase of 24% (2017: GBP218,054)

   --      Payment of 0.83 pence per share dividend declared 

Operational Highlights:

-- Ace has increased its portfolio since 30 April 2018 with four strong purchases of the following properties:

   -      Tweedale House, Oldham and Brocol House Wigan for a combined cost of GBP6,400,000; 
   -      Princes Court, Leicester for GBP4,385,000 and Mecca Bingo, Chesterfield for GBP3,999,000 

-- These purchases show Ace's proactive strategy in action, finding multi-use and attractive locations with strong rental agreements and established tenants

-- Ace sold Hume House for GBP3,900,000, representing an overall 307% return on our investment over the purchase price of GBP1,670,000 in 2014

-- Ace is well placed to thrive no matter what many possible outcomes to the current political and economic situation presents

Ismail Ghandour, Chief Executive Officer, commented:

"This period was very productive for Ace and we are extremely pleased to have ended it on such a high note with some exciting acquisitions and a well-placed disposal.

"In the current unstable political and financial environment, Ace's steady strategy continues to pay off and we believe that no matter what the eventual outcome of Brexit brings, we will continue to show growth.

"This is based on an assessment of our sound business model. In short we are well placed as our properties are fully let; the majority of our tenants are national or local government or triple-A commercial; and most leases cover the next nine plus years.

"London property can often be overvalued and more prone to fluctuations in the global financial market, which is why we continue to action our regional property strategy as we believe that there are more profitable opportunities in smaller, thriving towns outside of the capital.

"We take pride in the steady and reliable Company our strong management team has shaped over the years.

"Furthermore, we will continue to be regular dividend payers, rewarding our shareholders for their commitment to our strategy and business model.

-ends-

For further information, please contact:

 
 Ace Liberty & Stone Plc 
 Ivan Minter, Financial Director                    Tel: +44 (0) 20 7201 8340 
                                                http://acelibertyandstone.com 
 Alfred Henry Corporate Finance Ltd, 
  NEX Exchange Corporate Adviser 
 Jon Isaacs / Nick Michaels                         Tel: +44 (0) 20 3772 0021 
 
 Northland Capital Partners Limited 
  Broker 
 Vadim Alexandre / Abigail Wayne / Rob Rees          Tel: +44 (0)20 3861 6625 
 
 Belvedere Communications 
 John West / Kim van Beeck                          Tel: +44 (0) 20 3687 2756 
 
 ACF Equity Research 
 Christopher Nicholson / Amalia Barnoschi           Tel: +44 (0) 20 7558 8974 
 
 

Chairman's statement

It is with great pleasure that I present the results for Ace for the period from 1 May 2018 to 31 October 2018.

We have achieved a great deal this year and this set of results reflects the steady and reliable progress that the Company's strategy delivers with a senior management team with a proven track record at the helm.

Amid all the noise and confusion over Brexit, I am pleased to remind you that Ace is well-placed to thrive, as we believe our long term rental agreements and regional approach to our investment portfolio will continue to pay off. We have confidence we shall continue to create profit, no matter which of the many possible outcomes to the present political and economic situation prevails for the following reasons:

                 a)     Our current GBP70m portfolio has an LTV of only 55%; 
                 b)    The resulting rental income of GBP5.2m p.a. generates free cash in excess of GBP250k per quarter; 
                 c)     All properties are fully let; 
                 d)    51% of tenants are national or local government; 45% are triple-A commercial; 
                 e)    Weighted Average Unexpired Lease to Break is 9.6 years; and 
                  f)     IRR is 13.8%. 

We are particularly proud that rental income for the Half Year has increased by 32% and we believe that the Full Year is set to exceed our 2018 numbers - we believe we shall achieve a figure over GBP3.5M. Profit from continuing operations for the current year has increased by 24%; another reflection of our steady growth and our simple, but strong business model.

During this period Ace has increased its portfolio with the purchase of Tweedale House, Oldham and Brocol House Wigan for a combined cost of GBP6,400,000, and Princes Court, Leicester for GBP4,385,000. Since 31 October the Company has also purchased the Mecca Bingo Hall in Chesterfield for GBP3,999,000. These properties have all been financed with loan facilities advanced by Coutts & Co.

During the period under review the Company has also sold Hume House for GBP3,900,000, a welcome profit over the purchase price of GBP1,670,000 in March 2014. This sale represents a 307% return overall on our investment and illustrates our strategy in action.

As noted in my statement on the Full Year results to 30 April 2018, the impact of IFRS reporting requirements has been to charge substantial costs against profit until the expiry of the Convertible Loan Notes in December 2019. From that date onwards, the Company's results will show the benefits from the ownership of the properties purchased without burden of the costs of the fundraising.

The support of the Company's shareholders has been recognised - as promised - with the payment of a first Interim dividend in respect of the current year on 9 November 2018. It is the Board's intention that this payment of 0.83 pence per share will be the first of three equal payments in respect of the year ending 30 April 2019. This compares with one payment, on 26 July 2018, in respect of the year ended 30 April 2018 of 1.25p.

The directors therefore face the future with confidence, continuing their successful policy of expansion by means of carefully-selected acquisitions resulting in affordable, increasing, dividend payments to shareholders.

 
 Dr Tony Ghorayeb 
  Chairman 
  28 January 2019 
 

Unaudited group statement of comprehensive income

for the six months ended 31 October 2018

 
                                        Six months                        Six months                    Year ended 
                                  ended 31 October                  ended 31 October                      30 April 
                                  2018 (Unaudited)                  2017 (Unaudited)                2018 (Audited) 
                                               GBP                               GBP                           GBP 
 
 Turnover                                1,945,858                         1,472,190                     3,515,088 
                              --------------------  --------------------------------  ---------------------------- 
 
 Gain / (loss) on disposal 
  of investment property                   499,549                                 -                      (40,758) 
 Administrative expenses                 (531,010)                         (703,604)                   (1,042,612) 
 Fair value gains on 
  investment 
  property                                       -                                 -                       250,000 
 Fair value losses on assets 
  held for sale                                  -                                 -                     (250,000) 
 Finance cost                          (1,585,594)                         (417,850)                   (2,219,199) 
 Finance income                              5,496                             1,550                         1,622 
                              --------------------  --------------------------------  ---------------------------- 
 Profit for the period                     334,299                           352,286                       214,141 
                              --------------------  --------------------------------  ---------------------------- 
 Taxation                                 (63,517)                         (134,232)                       147,154 
                              --------------------  --------------------------------  ---------------------------- 
 Profit from continuing 
  operations                               270,782                           218,054                       361,295 
                              --------------------  --------------------------------  ---------------------------- 
 
                                             pence                             pence                           pence 
 Basic                                        0.67                              0.55                            0.91 
 Diluted                                      0.46                              0.43                            0.61 
 
 

Unaudited group statement of financial position

(MORE TO FOLLOW) Dow Jones Newswires

January 29, 2019 02:00 ET (07:00 GMT)

DJ Ace Liberty & Stone PLC Half-year Report -2-

at 31 October 2018

 
                                  As at 31 October    As at 31 October   As at 30 April 
                                  2018 (Unaudited)    2017 (Unaudited)             2018 
                                                                              (Audited) 
                                               GBP                 GBP              GBP 
 ASSETS 
 Non-current assets 
 Investment properties                  61,768,232          40,962,100       50,487,866 
                                ------------------  ------------------  --------------- 
 
 Current assets 
 Assets held for sale                    4,349,000           8,416,000        7,734,000 
 Trade and other receivables               599,083           1,071,292          934,479 
 Cash and cash equivalents               4,350,540           4,313,808        5,180,225 
                                                    ------------------  --------------- 
                                         9,298,623          13,801,100       13,848,704 
                                ------------------  ------------------  --------------- 
 
 TOTAL ASSETS                           71,066,855          54,763,200       64,336,570 
                                ------------------  ------------------  --------------- 
 
 EQUITY AND LIABILITIES 
 Current Liabilities 
 Liabilities held for 
  sale                                   1,559,999           2,537,521        2,587,141 
 Trade and other payables                2,310,538           1,551,972        1,239,869 
 Taxation                                  162,098             304,627          162,098 
 Borrowings                              1,304,500           1,440,550          690,000 
                                ------------------  ------------------  --------------- 
                                         5,337,135           5,834,670        4,679,108 
                                ------------------  ------------------  --------------- 
 Non-current liabilities 
 Borrowings                             45,352,687          29,038,366       40,003,625 
 Deferred tax                              278,019             335,383          214,502 
                                ------------------  ------------------  --------------- 
                                        45,630,706          29,373,749       40,218,127 
                                ------------------  ------------------  --------------- 
 EQUITY 
 Issued capital and 
  reserves 
 Share capital                          10,299,074          10,021,156       10,065,887 
 Share premium reserve                   8,301,222           7,508,463        7,643,310 
 Share option reserve                      479,180             479,180          479,180 
 Other reserve                             579,548             912,209          579,548 
 Treasury shares                         (480,620)           (480,620)        (480,620) 
 Retained earnings                         920,610           1,114,393        1,152,030 
                                ------------------  ------------------  --------------- 
 Total equity attributable 
  to owners of the parent               20,099,014          19,554,781       19,439,335 
                                ------------------ 
 TOTAL EQUITY AND LIABILITIES           71,066,855          54,763,200       64,336,570 
                                ------------------  ------------------  --------------- 
 
 

Unaudited Group cash flow statement

for the six months ended 31 October 2018

 
                                                  Six months            Six months         Year ended 
                                            ended 31 October      ended 31 October           30 April 
                                            2018 (Unaudited)                  2017     2018 (Audited) 
                                                                       (Unaudited) 
                                                         GBP                   GBP                GBP 
 Profit before tax                                   334,299               352,286            214,141 
 Cash flow from operating activities 
 Adjustments for: 
 Finance income                                      (5,496)               (1,550)            (1,622) 
 Finance costs                                     1,167,986               417,850          2,219,199 
 Gain on disposal of investment 
  property                                         (499,549)                     -             40,758 
 Decrease / (increase) in receivables                335,396             (893,126)          (756,313) 
 Increase in payables                              1,070,670               518,547            476,019 
 Tax paid                                                  -                     -          (337,186) 
 Interest paid                                   (1,167,986)             (417,850)        (1,520,350) 
                                        --------------------  --------------------  ----------------- 
 Net cash generated / (used) 
  by operating activities                          1,235,320              (23,843)            334,646 
                                        --------------------  --------------------  ----------------- 
 Cash flows from investing 
  activities 
 Interest received                                     5,496                 1,550              1,622 
 Purchase of investment properties              (11,280,366)          (11,508,797)       (20,784,558) 
 Sale of investment properties                     3,884,549             1,110,000          1,501,242 
                                        --------------------  --------------------  ----------------- 
 Net cash used by investing 
  activities                                     (7,390,321)          (10,397,247)       (19,281,694) 
                                        --------------------  --------------------  ----------------- 
 Cash flows from financing 
  activities 
 Share issue, net of issue 
  costs                                              891,099               575,300             85,300 
 Short term loans advanced                                 -                     -          1,000,000 
 Long term loans advanced                          6,308,562            15,100,529         26,673,688 
 Long term loan repaid                           (1,372,142)             (898,020)        (3,593,404) 
 Equity dividend paid                              (502,203)             (393,721)          (389,121) 
                                        --------------------  --------------------  ----------------- 
 Net cash generated by financing 
  activities                                       5,325,316            14,384,088         23,776,463 
                                        --------------------  --------------------  ----------------- 
 Net (decrease) / increase 
  in cash and cash equivalents                     (829,685)             3,962,998          4,829,415 
 Cash and cash equivalents 
  at the beginning of the period                   5,180,225               350,810            350,810 
                                        --------------------  --------------------  ----------------- 
 Cash and cash equivalents 
  at the end of the period                         4,350,540             4,313,808          5,180,225 
                                        --------------------  --------------------  ----------------- 
 
 
 

The interim financial information set out herein does not constitute full financial statements within the meaning of Section 240 of the Companies Act 2006. The unaudited Group results have been prepared under the historical cost convention, in accordance with the Companies Act 2006 and applicable accounting standards in the United Kingdom.

The interim report has been prepared using accounting policies consistent with those set out in the Company's Annual Report and Accounts for the period to 30 April 2018. Those financial statements were prepared on a going concern basis.

The interim report for the six months to 31 October 2018 was approved by the Board on 28 January 2019

The Directors of Ace Liberty & Stone Plc accept responsibility for this announcement.

For further information, please contact:

 
 Ace Liberty & Stone Plc                    www.acelibertyandstone.com 
 Ivan Minter, Financial Director             Tel: +44 (0) 20 7201 8340 
                                           --------------------------- 
 
 Alfred Henry Corporate Finance Ltd, 
  NEX Exchange Corporate Adviser                   www.alfredhenry.com 
                                           --------------------------- 
 Jon Isaacs / Nick Michaels                  Tel: +44 (0) 20 3772 0021 
                                           --------------------------- 
 
 Northland Capital Partners Limited 
  Broker                                           www.northlandcp.com 
                                           --------------------------- 
 Vadim Alexandre / Abigail Wayne              Tel: +44 (0)20 3861 6625 
  / Rob Rees 
                                           --------------------------- 
 
 Belvedere Communications                          www.belvederepr.com 
                                           --------------------------- 
 John West / Kim van Beeck                   Tel: +44 (0) 20 3687 2756 
                                           --------------------------- 
 
 ACF Equity Research                         www.acfequityresearch.com 
                                           --------------------------- 
 Christopher Nicholson / Amalia Barnoschi    Tel: +44 (0) 20 7558 8974 
                                           --------------------------- 
 

Notes to Editors

(MORE TO FOLLOW) Dow Jones Newswires

January 29, 2019 02:00 ET (07:00 GMT)

DJ Ace Liberty & Stone PLC Half-year Report -3-

Ace Liberty & Stone Plc is a property investment company with a diverse portfolio of properties located across the UK, currently including Leeds, Sunderland, Plymouth, Leicester, Barnstaple, and Manchester. The Company locates commercial properties with Triple-A tenants which have the potential for an increase in value. Ace has maintained a track record of generating strong profits at disposal of properties and achieving better-than-average returns on capital which are in turn utilised to underwrite an increasing dividend flow to shareholders. With strong support from shareholders and mortgage lenders, the Company is currently seeking further investment opportunities in the UK to create value for existing and new investors.

Ace is run by a board with extensive property experience, an excellent network of contacts and relevant professional qualifications. This sector expertise allied to a flexible decision-making process has allowed the Board to identify promising opportunities and act promptly to secure investments.

For more information on the Company please visit www.acelibertyandstone.com

- Ends -

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January 29, 2019 02:00 ET (07:00 GMT)