Ediston plans dividend hike as buys four retail warehouse parks – Ediston Property Income is seeking to expand and raise its dividend at the same time.
Dividend increase
“It is the Board’s intention to increase the annualised dividend by 4.5 per cent. to 5.75 pence per share, in the absence of unforeseen circumstances, commencing with the dividend in respect of the month ending 31 January 2018 which will be paid in February 2018. In determining the level of future dividends, the Board will seek to ensure that any dividend level is sustainable over the medium term taking into account any expected increase in dividend cover and the projected income performance of the company.”
Retail park purchase
Ediston has entered into a conditional acquisition agreement with the Stadium Group to buy a new portfolio of four retail warehouse parks with an aggregated market value of approximately GBP144 million. The deal will result in a substantial increase in the size of the portfolio to approximately GBP317.6 million.
The Board believes that the Acquisition will introduce a number of asset management opportunities which should enhance returns to shareholders. The manager believes that there is credible growth potential within the new assets and scope to improve the income stream of each new retail warehouse park.
They need to raise at least £37m to get the deal done and shareholders also have to approve the deal. If everything goes according to plan, the deal should complete in early December (there is a deadline of 22 December or the deal will fall through). A new loan facility with Aviva Commercial Finance Limited will help fund the deal. This consists of a 10 year term loan facility of up to approximately £54 million.Stadium Group are taking up to £36.5m in new Ediston shares as part of the consideration. Gearing is expected to remain at broadly 30 per cent. of gross assets. Depending on the extent of the proceeds from the share issue, gearing may be increased to 35 per cent., the maximum limit under the Company’s investment policy, but this is not expected to be the gearing level for the Group over the longer term.
William Hill, Chairman of Ediston Property Investment Company plc commented: “The Manager has made consistent good progress in improving the company’s income profile and it is good news that we are today able to announce an increase in the dividend level. I am delighted with the progress of this property transaction and consider these proposals to be an important next step in the development of the Company. I am also encouraged with the discussions we have had to date with both our existing shareholders and potential new investors in relation to the equity raising to support these proposals. The Board believes that acquiring the New Portfolio will be accretive to the level of dividend cover and will provide a number of asset management opportunities which should enhance the income profile and the capital value of the Group’s property assets.”
EPIC : Ediston plans dividend hike as buys four retail warehouse parks