UIL Ltd.

Earnings Release • Oct 5, 2020

National Storage Mechanism | Additional information

RNS Number : 0118B

Ace Liberty & Stone PLC

05 October 2020

EMBARGOED UNTIL 7 A.M. Monday 5 October

Ace Liberty and Stone plc

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

FINAL RESULTS FOR THE YEAR ENDED 30 APRIL 2020

Well-placed to thrive in turbulent times

Benefits expected from renewed interest in regional hubs

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 its results for the year ended 30 April 2020. 

Financial Highlights:

·      Revenue for the year up 26.0% to £6,391,897 (FY2019: £5,072,435)

·      Improved debt / equity ratio at 163% (FY2019: 289%)

·      Increased shareholders' funds of £31,647,257 (FY2019: 21,170,030) (49.5% increase)

·      Increased cash resources of £7,432,958 (FY2019: £1,956,742)

Operational Highlights:

·      Tenancies of local and national government departments stable at 58% (FY2019: 59%), ensuring continuity of income

·      Sale of Hillcrest House, Leeds arranged at £2,300,000 (purchased for £1,450,000)

·      Property purchases since year end totaling £3,140,000 yielding 8.3% with long term bank and building society tenants

·      These transactions show Ace's proactive investment and trading strategy in action; finding multi-use and attractive locations with strong rental agreements and well established, mainly governmental, tenants - many of whom provide essential services to the British public.

Ismail Ghandour, Chief Executive Officer, commented:

"Coronavirus has caused a rethink on the use of office space.  Our focus has always been on regional hubs across the country rather than prestigious central London properties which now look vulnerable to the expansion of working from home.

"We have a strong, stable position with a healthy balance sheet and good cashflow. This sets us up to explore further opportunities, even in this unusual economic and political situation."

-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, AQSE Growth Market Corporate Adviser
Jon Isaacs / Nick Michaels	Tel: +44 (0) 20 3772 0021
	www.alfredhenry.com
Belvedere Communications
John West /Llew Angus	Tel: +44 (0) 20 3687 2756
	www.belvederepr.com
SP Angel Corporate Finance LLP Broker
Vadim Alexandre / Rob Rees	Tel: +44 (0)20 3470 0470
	www.spangel.co.uk
ACF Equity Research
Christopher Nicholson / Amalia Barnoschi	Tel: +44 (0) 20 7558 8974
	www.acfequityresearch.com

Chairman's Statement

It is with great pleasure that I recommend this Annual Report which shows the Group in a solid position. The Group has followed a consistent policy over the past five years and there is comprehensive information in the document which supports the views I have expressed here. I commend it to your study, especially the Strategic Report and the Key Performance Indicators.

Reviewing my previous statement in the light of subsequent events, especially the COVID 19 pandemic, shows that the directors' policy of cautious expansion outlined then was exactly what was needed.

My statement of last year detailed the strength of the Company at that point. Early in 2019, the directors decided to buy no further properties for a short period, but enjoy the annual rental income of some £6.5m from the existing portfolio without devoting resources to further growth.

With hindsight, this has proved to be an excellent decision.

During the year under review the Group made no property acquisitions. However, taking advantage of easing property prices, it has now acquired 16-17 Westborough, Scarborough, North Yorkshire for £1,430,000 partly financed by a secured loan of £625,000 from Coutts & Co. The tenant is Skipton Building Society with a passing rent of £131,000 p.a. The Group has also exchanged contracts for the irrevocable purchase of 78/82 English Street and 49/53 Blackfriar Street, Carlisle at a price of £1,710,000 with completion by 7 December 2020. The main tenant is Clydesdale Bank plc with a rent of £120,000 p.a. Both properties have long unexpired leases with very creditworthy tenants and further reinforce our ownership strategy.

The Group has acted to improve its debt / equity ratio. At 30 April 2019 it stood at 289%; at 30 April 2020 it was 163%. The 5% CLN issued in January 2018 matured in December 2019 and by 30 April 2020 £3,838,700 had been converted into equity by means of conversion or exercise of associated warrants. £875,000 was still outstanding at that date, having been rolled over on the existing terms. In April 2020 the Company agreed to offer the holders of the 7% Loan the option of converting their holdings into shares to be issued at 50p. Holders of loans totalling £2,200,000 agreed, leaving £1,000,000 outstanding. These actions have greatly strengthened the Group balance sheet and removed a substantial liability for capital repayments and interest liabilities when it is in Ace's best interests to conserve its cash resources.

In the autumn of 2019, the directors became aware there was substantial investor demand for the Company's shares in Lebanon. Accordingly, the directors exercised their options over 6,983,333 shares and sold them into the market. This simultaneously raised cash for the Group's activities and removed the overhang to the market.

In early 2020, it became apparent to the Directors that the Covid 19 virus would have a substantial, but then unquantified, impact on the UK economy. As a matter of prudence they decided to suspend dividend declarations temporarily to conserve cash resources.

The Group collected 82% of the rents due to it at the March quarter day and made agreements with those tenants whose businesses were badly affected by the lockdown to allow deferral of payments until activity returned to normal with all arrears collectible by December 2021. One tenant subsequently entered into a Creditors' Voluntary Arrangement and this will result in the loss to the Group of approximately £78,000 in rental income. With this one exception, all the Group's tenants have resilient business activities and their ongoing ability to pay their rent is undiminished.

Forecasting the future is a perilous occupation. However three things are clear;

1.     The economic consequences of the pandemic will be far-reaching and opportunities will arise out of the ensuing turbulence.

2.     The Companies which are in the best position to respond are those with strong balance sheets and cash resources.

3.     Ace has a robust property portfolio with substantial cash balances and is looking to take advantage of any opportunities which arise.

We look forward to the next year with great confidence.

Dr Tony Ghorayeb

Chairman

Date:  2nd October 2020

Consolidated Statement of Comprehensive Income for the year ended 30 April 2020

			2020			2019
			£			£
Revenue				6,391,897				5,072,435
Gain / (loss) on disposal of investment property				(13,026)				284,138
Administrative expenses				(1,805,592)				(1,827,857)
Fair value gain on investment property				(500,000)				1,247,371
Fair value losses on assets held for sale				(300,000)				(320,079)
Lease breakage fee				173,375
Finance cost				(3,972,244)				(3,354,830)
Finance income				34,842				5,511
Share based payment charge				-				(347,726)
Profit before taxation				9,252				758,963
Taxation				111,113				6,754
Profit after taxation				120,365				765,717
Other comprehensive income				341,604				48,845
Total comprehensive income for the period				461,969				814,562
Attributable to:
Owners of the parent				461,969				814,562

Earnings per share on continuing activities		Pence		Pence
Basic earnings per share attributable to equity owners of the parent	2	0.97		1.97
Diluted earnings per share attributable to equity owners of the parent	2	0.75		1.15

Consolidated Statement of Financial position at 30 April 2020

			2020		2019
	ASSETS		£		£
	Non-current assets
	Investment property		76,888,096		79,538,096
	Deferred tax		7,054		-
			76,895,150		79,538,096
	Current assets
	Assets held for sale		10,429,921		8,784,921
	Trade and other receivables		789,256		510,490
	Cash and cash equivalents		7,432,958		1,956,742
			18,652,135		11,252,153
TOTAL ASSETS			95,547,285		90,790,249
	EQUITY AND LIABILITIES
	Current liabilities
	Liabilities relating to
	assets held for sale		1,350,625		1,440,125
	Trade and other payables		5,536,009		4,833,381
	Taxation		100,121		96,681
	Borrowings		2,668,972		15,921,701
			9,655,727		22,291,888
	Non-current liabilities
	Borrowings		54,244,301		47,212,143
	Deferred tax		-		116,188
			54,244,301		47,328,331
	Share capital		14,626,463		10,608,342
	Share premium		16,773,712		9,099,025
	Share option reserve		-		826,906
	Other reserve		211,185		341,603
	Treasury shares		(480,620)		(480,620)
	Retained earnings		516,517		774,774
	Total equity		31,647,257		21,170,030
	TOTAL EQUITY AND LIABILITIES		95,547,285		90,790,249

Consolidated Cash Flow Statement for the year ended 30 April 2020

						2020		2019
						£		£
Profit before tax						9,252		758,963
Cash flow from operating activities
Adjustments for:
Finance income						(34,842)		(5,511)
Finance costs						3,972,244		3,354,830
Gain on disposal of investment property						13,026		(284,138)
Fair value adjustment						800,000		(927,292)
Decrease / (Increase)  in receivables						(278,766)		423,989
Increase in payables						702,627		1,558,525
Tax paid						(8,809)		(156,977)
Interest paid						(2,547,166)		(1,459,868)
Other finance costs paid						(745,631)		(365,562)
Share based payment charge						-		347,726
Net cash generated by operating activities						1,881,935		3,253,685
Cash flows from investing activities
Interest received						34,842		5,511
Purchase of investment properties						-		(32,952,499)
Sale of investment properties						205,000		4,063,138
Net cash used by investing activities						239,842		(28,883,850)
Cash flows from financing activities
Share issue, net of issue costs						6,104,665		-
Long term loans advanced						-		23,415,375
Long term loans repaid						(1,480,000)		(690,000)
Short term loans advanced						-		1,440,125
Short term loans repaid						(550,000)		(665,705)
Equity dividend paid						(720,226)		(1,093,113)
Net cash generated by financing activities						3,354,439		22,406,682
Net (decrease) / increase in cash and cash equivalents						5,476,216		(3,223,483)
Cash and cash equivalents at the beginning of the period						1,956,742		5,180,225
Cash and cash equivalents at the end of the period						7,432,958		1,956,742

NOTES TO PRELIMINARY RESULTS FOR THE PERIOD ENDED 30 APRIL 2020

1.         The financial information set out above does not constitute statutory accounts for the purpose of Section 434 of the Companies Act 2006.   The financial information has been extracted from the statutory accounts of Ace Liberty & Stone Plc and is presented using the same accounting policies, which have not yet been filed with the Registrar of companies, but on which the auditors gave an unqualified report on 2nd October 2020.

The preliminary announcement of the results for the year ended 30 April 2019 was approved by the board of directors on 2nd October 2020.

2.         Earnings per Share

The calculations of earnings per share are based on the following earnings and numbers of shares.
			£		£
Profit for the period attributable to equity owners			461,969		814,562
			No. of shares of 25p		No. of shares of 25p
Weighted average number of shares
For basic earnings per share			47,609,342		41,245,673
Dilutive effect of share options			14,312,252		29,837,805
For diluted earnings per share			61,921,594		71,083,478
Earnings per share			pence		pence
Basic			0.97		1.97
Diluted			0.75		1.15
			£		£
Dividends declared during the year - per share of 25p			0.025		0.0291
Dividends declared during the year - total			731,725		1,196,786

- ends -

The Directors accept responsibility for this announcement.

Notes to Editors

Ace Liberty & Stone Plc is a property investment company with a diverse portfolio of properties located across the UK, predominantly in the midlands and north of England, which are now the focus of Government incentives. The Company locates commercial properties which have creditworthy tenants, several years' rental income and the potential for an increase in value through creative asset management activity, such as change of tenancy, change of use or new lease negotiation.  Ace has maintained a track record of generating strong profits at disposal of properties and achieving better-than average returns on capital. With strong support from shareholders and mortgage lenders, the Company is currently seeking to deploy its strong balance sheet and is 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 has allowed the Board to identify opportunities and act promptly to secure investments.

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

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