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Wellcome Trust offer for Urban&Civic a persuasive outcome

Urban&Civic has announced its annual results for the year ended 30 September 2020, which includes commentary on the previously announced recommended offer from Wellcome Trust that the board describes as a persuasive outcome for all stakeholders. It says that the all cash offer of 345p per share is above up to date EPRA NAV and means that UANC outperformed the FTSE 350 Real Estate Index by some 70 per cent from listing up to the day of the offer announcement. Key highlights from the announcement are as follows:

Recommended offer from Wellcome Trust

  • Recommended offer for an acquisition by Wellcome Trust; acquisition consideration represents full recognition of Urban&Civic’s unaudited EPRA NAV of 343.2p per share at 30 September 2020
  • Cash offer above up to date EPRA NAV means that Urban&Civic outperformed the FTSE 350 Real Estate Index by some 70 per cent from 2014 listing up to the day of offer announcement
  • Acquisition affords the potential for further growth via additional strategic projects and partnerships

Financial highlights

  • Headline EPRA net asset value per share down 4.7 per cent over the year at 343.2p (30 September 2019: 360.3p), but up 2.4 per cent since March (31 March 2020: 335.1p) reflecting valuation uncertainties in light of Covid-19 crisis
  • Group share of current contracted forward revenues stable at £101.6 million (30 September 2019: £101.7 million)
  • Loss before tax for the year of £8.1 million (profit for the year ended 30 September 2019 of £16.3m); fall predominantly due to property revaluations and lower land promotion and commercial property sales
  • Large site discount at £206 million (41 per cent of EPRA NAV); or 142p per share
  • EPRA net assets per share + large site discount (343.2p + 142p) = 485.2p at 30 September 2020: 2.0 per cent down on September 2019

Operational highlights

  • Reservations at the five strategic sites in delivery up 29 per cent in the fourth quarter to September 2020 on pre lockdown levels
  • Large scale planning approvals secured at Manydown and Key Phase 1 of Waterbeach, with four consecutive planning applications approved for Catesby
  • Four new licences with housebuilders close to signature, including repeat contracts with existing customers
  • Acceleration in aggregate spend through the pandemic underpinned by expansions in project facilities made available from Homes England; £31 million increase across four facilities

Comments from Nigel Hugill, Chief Executive

“The fundamental strength of the Urban&Civic model has been demonstrated through this most testing of years. Confident capital investment and rethought housebuyer priorities have contributed to post July sales and prices reaching best ever levels. Urban&Civic champions Master Development and continues to attract material new opportunities for growth requiring additional financing to support an unambiguous net money out 5-7 years; net money back 15 + years model.  The alignment with the investment horizons and community building aspirations of Wellcome is very evident. Nevertheless, the support of shareholders since listing in May 2014 has been vital to the achievement of the leading position we enjoy today.”

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