Stenprop is today providing an update on the impact of COVID-19 on its business and the measures it is taking to manage the risks presented by the virus.
- The focus is on managing cash resources very carefully and maintaining liquidity in the business. The Company currently has £60 million of unrestricted cash reserves.
- The overall loan-to-value ratio (LTV) stands at approximately 40.7% based on the most recent property valuations as at 30 September 2019 and adjusted for subsequent acquisitions and disposals. When unrestricted cash is deducted from loans, the LTV is 29.6%.
- Total debt stands at £219.9 million. The portfolio weighted average interest rate is 2.61%.
- Significant headroom exists for both interest cover and LTV loan covenants. LTV covenants allow for an average 33% reduction in values from the levels last reported (adjusted for acquisitions and disposals). This measure increases to 44% when unrestricted cash is included. Loan facilities subject to debt service cover ratio covenants allow for an average reduction in net rents of 64%.
- The Company recently completed the refinancing of the loan in relation to the Trafalgar Court property in Guernsey. The refinancing will take effect on 31 March 2020. The £28.0 million loan has been extended for two years, maturing on 31 March 2022.
- Approximately 57% of Stenprop’s portfolio (by value) comprises 70 multi-let industrial (MLI) estates spread across the UK with more than 850 tenants. They are engaged in a very wide range of businesses, serving the needs of their UK customers in their local communities or across the country. It is too early to say with any accuracy what the impact will be for these occupiers, although clearly some sectors are more directly impacted than others. Stenprop has written to all of their customers expressing our support and remain in close contact with them.
- Approximately 18% of their portfolio comprises three daily-needs retail centres in central Berlin, all of which are anchored by strong food retailers, and five retail warehouses in Germany, which are let to a bike and ski business.
- Approximately 13% of the portfolio comprises Trafalgar Court, the largest office building in Guernsey predominantly let on a long lease to Northern Trust with more than eight years remaining.
- 3% of the portfolio comprises a rehabilitation medical facility and health club business in Lugano, Switzerland. This has been required to close by order of local government and we are monitoring the position closely.
- In this rapidly-evolving situation, Stenprop is well placed to respond to the challenges they face. In addition to low leverage and large cash balances, significant upgrades to their IT infrastructure carried out over the last eighteen months have meant that their staff have adapted well to working from home and continue to collaborate effectively from different locations.
- Stenprop remains a financially-sound business with a capital structure which is well placed to cope with a prolonged period of uncertainty.