Ace Liberty & Stone - Half-year Report

Ace Liberty and Stone plc

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

INTERIM RESULTS FOR SIX MONTHS TO 31 OCTOBER 2023

Ace Liberty and Stone Plc (AQSE: ALSP), the active property investment company capitalising on commercial property investment opportunities across the UK, is pleased to announce Interim Results for the period from 1 May 2023 to 31 October 2023. 

Highlights*:

·      Rental income increased slightly to £2,714,887 (H1 2022: £2,700,031)

·      Administration costs down 19.4% to £699,032 due to one-off costs in the prior year (H1 2022: £867,144)

·      Loss before tax of £4,686 largely driven by increased finance costs (H1 2022: profit £731,383)

·      £1 million shareholder loan repaid

·      2 year extension of the £10 million convertible loan note agreed

·      Completion of Melton Mowbray acquisition - financed with Coutts & Co

·      Cash resources of over £3 million available

*Note: Full details can be found in the Chairman's statement

Ismail Ghandour, Chief Executive Officer, commented:

"The UK economy is experiencing a period of disruption due to high inflation and rising interest rates. Together with the ongoing wars in Ukraine and the Middle East, we expect a continued period of uncertainty as we move through 2024. With a robust balance sheet and significant cash resources, Ace is in a strong position to weather the storm and take advantage of future opportunities as they arise."

Chairman's statement

I am pleased to announce the Company's interim results for the half year ended 31 October 2023. Turnover at £2,714,887 for the half year is up 0.6% on the comparable value for the previous year of £2,700,031. Pre-tax profit has reduced from £731,383 in H1 2022 to a loss of £4,686 in H1 2023 which is largely the result of increased finance costs driven by market interest rates. No adjustments have been considered necessary to the values of investment property assets at the half year.

During the period the Company completed the acquisition of the freehold of Egerton Park service station, Melton Mowbray. The property comprises a BP branded forecourt and a M&S branded convenience store. The current annual rental income is £204,814 with lease expiry in 2033. Melton Mowbray was comprehensively refurbished in 2014 to include two electric charging points for vehicles, improving the energy performance of the property. This aligns with our target of improving our overall EPC ("Energy Performance Certificate") range across the portfolio.

The planned acquisition of 9 Hunters Row, Stafford will no longer proceed following a mutual agreement with the seller. The seller informed the Company that it received an offer for the property, from another entity, with better terms. Given the current market conditions, the Board believes that it is more beneficial for Ace to retain cash resources in order to be flexible to opportunities in the market. Therefore, the seller will return the deposit paid by Ace of £631,453, together with accrued interest.

Several other transactions are under consideration and acquisitions and disposals will be made when advantageous to the Company in the current unsettled economic circumstances.

The Ace portfolio remains robust with a strong occupancy rate of 96%. Discussions have continued with Sunderland City Council on the future re-development of Fawcett House where the existing vacancy lies. Measures have been put in place to mitigate void costs in this property, where possible.

On 22 May 2023, the Company repaid the unsecured shareholder loan of £1,000,000 in full. In addition, the final sum of £50,000 relating to the 5% convertible loan notes was settled with the balance and associated interest settled in shares.

The £10 million convertible loan note has been renewed for a further two years, with expiry in May 2025.

The Company currently has cash resources of approximately £3 million to invest in UK freehold and long leasehold commercial properties according to its existing policies. Surplus funds will be invested short term with UK deposit takers regulated by the Bank of England. There has been no change in the status of the deposit placed with LiBank s.a.l.

A portion of the Company's loan facility with Coutts & Co, which stood at £17,675,500 at the balance sheet date, is due to mature in April 2024. Negotiations are well advanced to renew or replace this loan.

As detailed in the 2023 Annual Report, the Board remains committed to establishing regular distributions to shareholders and dividend payments will recommence once adequate reserves are available.

The following statistics are key to the Company's activities at 31 October 2023:

a)     Portfolio Bank Loan to Value is 53% (H1 2022: 55%)

b)    Weighted Average Unexpired Lease to Break is 6.50 years (H1 2022: 6.52 years)

c)     46% of tenants are government bodies (H1 2022: 47%); 52% are major industrial & commercial (H1 2022: 51%)

As we face into a new year, the economy is once again impacted by the ongoing wars in Ukraine and in the Middle East. Whilst we expect a period of disruption in the UK property market, the Directors believe the Group is well positioned to withstand the challenges and prosper in the future.

Unaudited group statement of comprehensive income

for the six months ended 31 October 2023

  *Unaudited