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QuotedData’s morning briefing 22 August 2022

In QuotedData’s morning briefing 22 August 2022:

  • AEW UK REIT (AEWU) has sold 225 Bath Street, Glasgow for £9,300,000. Planning consent has been gained by new owners IQ for the demolition of the property and development of a 527-unit student accommodation scheme. The sale agreement required AEWU to negotiate with tenants to bring the asset to vacancy and, as a result, following its sale the occupancy rate for AEWU’s remaining portfolio will increase to 91.60% from 86.97% as at 30 June 2022.  Reinvestment of the sale proceeds into pipeline assets under exclusivity is expected to provide a significant boost to earnings due to both higher levels of anticipated income receipts and lower running costs. Laura Elkin, manager of AEWU, said: “As the culmination of a long running business plan, we are delighted to see this sale complete.  The disposal not only maximises the value of the asset but will increase occupancy levels across the remaining portfolio, reduce running costs and boost earnings, once capital is reinvested.  The proceeds from the sale are already under offer to assets in exclusivity and, as such, we expect to make further purchase announcements in the coming weeks.”
  • Bluefield Solar Income Fund (BSIF) has announced that its estimated NAV as of 30 June 2022 is 140p per share, which is approximately a 10% increase over its estimated NAV as at 31 March 2022 of 127.04p per share. This significant uplift is predominately due to an increase in power price forecasts and higher inflation expectations in the calendar year, which have been partially offset by a rise to the discount rates applied in the valuation, reflecting an increased proportion of non-solar assets in the portfolio and a rise in UK gilt rates. Bluefield Solar will announce its Full Year Results for the Year ended 30 June 2022 on Friday 30 September 2022.
  • NextEnergy Solar Fund (NESF) says its end June NAV was 121.7p, up by 8.2p or 7.2% over the end March figure. A quarterly dividend of 1.88p puts it on track for a 7.52p total for its financial year. The main contributors to the increase in the NAV were an increase in power price forecast assumptions (+6.2p) driven by an uplift in the short to medium term power forecasts provided by the company’s three independent advisers and Power Purchase Agreements (PPAs), updated short-term inflation assumptions (+4.7p), operating result net distributions to fund (+3.0p) and the upward revaluation of the NextPower III ESG investment (+0.4p). Knock off dividends and “movements in residual value” of 6.1p and you get the 8.2p uplift.
  • Pershing Square Holdings (PSH) has posted its interim results for the six months to 30 June 2022, during which time its NAV, including dividends, decreased by 26%. Meanwhile its  share price decreased by 27.3% compared with the S&P 500 which declined 20% over the same period. The portfolio’s performance was partially offset by the manager’s strategy to hedge against inflation and rising interest rates. The company initiated a share buyback programme in May after the board determined it appropriate, given the market conditions, PSH’s available free cash, the wide discount to NAV and the valuation of underlying portfolio positions. PSH completed the $100m program having repurchased 3,245,831 PSH Public Shares at an average discount of 31.7%. The manager said: “It has been an extraordinary year filled with uncertainty, the tragic war in Ukraine, enormous capital markets volatility, and political divisiveness. Even more so in this environment, we feel extremely fortunate to have the backing of long-term investors who enable us to do our best work. We are perpetually extremely grateful.”
  • Chrysalis (CHRY) says its NAV at end June 2022 was 163.48p, 22.8% lower than the end March 2022 estimate. This is the first NAV that has been published since the appointment of the new valuation committee. The big drivers were wefox, Klarna, Starling Bank and Brandtech. wefox was revalued upwards in line with the pre-money valuation (approximately €4bn) of the funding round which took place in July. Klarna was written down by 78%, in line with the valuation of the recent funding round completed in mid-June. Starling Bank is trading well but the valuations of listed peers within Starling’s comparable peer group have de-rated. In April, Chrysalis participated in Starling’s funding round with a £10m investment, part of a total of £130.5m at a valuation of £2.5 bn. The Brandtech Group is said to have continued to perform exceptionally well, but again valuations of peers have not performed well and the valuation has been reduced.

We also have sales from Circle Property and purchases from Impact Healthcare REIT.

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