| Fri 31 Mar 2006, 8:09 | | Liberty International Plc - Annual general meeting |
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LBT
LILII
Liberty International Plc - Annual general meeting statement and trading update
LIBERTY INTERNATIONAL PLC
(Registration number UK3685527)
ISIN Code: GB0006834344
JSE Code: LBT
Issuer Code: LILII
31 March 2006
LIBERTY INTERNATIONAL PLC
ANNUAL GENERAL MEETING STATEMENT AND TRADING UPDATE
The following is the text of the statement and trading update at today"s Annual
General Meeting.
Enquiries:
Liberty International PLC:
Sir Robert Finch Chairman +44 (0)20 7960 1273
David Fischel Chief Executive +44 (0)20 7960 1207
Aidan Smith Finance Director +44 (0)20 7960 1210
Public relations:
UK: Michael Sandler, Hudson Sandler +44 (0)20 7796 4133
SA: Matthew Gregorowski,
College Hill Associates +44 (0)20 7457 2020
Nicholas Williams,
College Hill Associates +27 (0)11 447 3030
This announcement includes statements that are forward-looking in nature.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
Liberty International PLC to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Any information contained in this announcement on the price at
which shares or other securities in Liberty International PLC have been bought
or sold in the past, or on the yield on such shares or other securities, should
not be relied upon as a guide to future performance.
"UK Real Estate Investment Trusts (`UK REITS")
On 22 March, the Government announced that they would bring forward in the 2006
Finance Bill legislation to establish tax-transparent UK property investment
companies, known as UK-REITS, with companies being able to elect to join on or
after 1 January 2007. Liberty International welcomes these firm proposals,
which follow extensive consultation, and believes that they will prove very
positive for the UK property sector. We comment below on certain key elements
of the proposed legislation.
First, a 2 per cent conversion charge will be levied on the market value of
investment properties of companies joining the new regime. In the case of
Liberty International, this charge, based on 31 December 2005 market values of
around GBP7 billion, would amount to around GBP140 million (or 40p per Liberty
International share). In comparison, Liberty International"s contingent
liability for tax on these assets on a disposal basis amounted to GBP642 million
as at 31 December 2005 (or 182p per Liberty International share).
Second, the original proposals put forward in 2005 contained the condition that
no shareholder should own 10 per cent or more of the company"s ordinary share
capital. The Budget has amended these proposals in a manner that would not
prevent a UK-REIT having a shareholder beneficially entitled to 10 per cent or
more of the share capital. Further, the Government has now indicated that, if
certain steps are followed, no adverse tax consequences will result. At
present, no individual shareholding in Liberty International exceeds 10 per
cent.
Third, the interest cover test will be set at a minimum of 1.25 times. Liberty
International comfortably exceeds this level.
REIT investors in other major jurisdictions have generally shown a strong
preference for specialist companies rather than generalists and regional
shopping centres have been one of the most favoured asset classes. Liberty
International has a strong and consistent financial record. We are confident
that the company would be an attractive REIT in the light of our size and
specialisation, with 86 per cent of our total assets at 31 December 2005 in
prime regional shopping centres and retail property overall amounting to 93 per
cent.
We shall be working with our advisers to review the detailed provisions of the
Finance Bill, which is expected to be published shortly, and the associated
regulations with a view to making a recommendation to shareholders in due course
on whether or not it would be in the best interests of the company to join the
new regime.
Trading update
Liberty International"s preliminary results were released on 15 February 2006,
some six weeks ago.
The UK investment property market has continued to be strong in 2006. For
example, the IPD UK monthly index to the end of February 2006 indicated a total
return on UK property for the first two months of 2006 of 2.4 per cent, 0.9 per
cent by way of income and 1.5 per cent by way of capital growth. The all-
property equivalent yield according to IPD continued to decline, from 6.02 per
cent at 31 December 2005 to 5.93 per cent at the end of February 2006.
Through our non-shopping centre business in the UK, Capital & Counties, we have
disposed of three office buildings outside London - Capital Point, Slough; One
Portway, Port Solent and Turnford Place, Cheshunt - for an aggregate sum of
GBP47 million, some GBP2.5 million above 31 December 2005 book values. These
disposals are in line with the group"s clearly outlined strategy for Capital &
Counties in the UK to focus on Central London and non-shopping centre retail.
On the financing front, we reported in February that we had increased committed
bank facilities since the end of 2005 by GBP90 million, to GBP495 million in
aggregate. We are also in advanced discussions to increase committed facilities
by a further GBP340 million of ten year bank loans; while in the US, we have
obtained a $67million 10 year committed mortgage at 5.5 per cent, secured
against the joint venture Trio apartment development in Pasadena, California.
These facilities will provide a substantial part of the finance required for our
GBP1.2 billion development programme.
We continue to make good progress with the UK shopping centre development
programme conducted through our wholly owned subsidiary, Capital Shopping
Centres, the leading company in the UK regional shopping centre industry.
The 460,000 sq ft Xscape leisure scheme at Braehead, Renfrew, Glasgow, a joint
venture with Capital & Regional plc, is scheduled to be launched next week on
6th April with 93 per cent of anticipated total rental income either exchanged
or in solicitors" hands.
The Northern extension of Manchester Arndale, increasing the overall size of the
centre to 1.4 million sq ft, the UK"s largest city centre shopping centre,
continues to be on programme for phased openings during 2006, with over 70 per
cent of the anticipated rental income of GBP18 million either exchanged or in
solicitors" hands.
Tenant interest is also strong for the St David"s 2, Cardiff, project. Momentum
is gathering on this substantial 967,000 sq ft development with the compulsory
purchase order process to complete site assembly now underway, tendering for the
construction contract well advanced and other conditions being satisfied to
enable construction to commence around the end of this year.
In the case of the Westgate Centre, Oxford, we remain on programme to submit the
detailed planning application in Spring this year; unsatisfied retailer
requirements for space in Oxford continue to be sizeable.
In respect of completed UK regional shopping centres, occupancy remains at the
high level of 98 per cent, while positive progress is being made with the rent
review programme which this year particularly involves The Chimes, Uxbridge, the
first round of rent reviews since opening in March 2001, and the two major out-
of-town regional centres, Lakeside, Thurrock, and MetroCentre, Gateshead.
As commented in the Preliminary Results, against a challenging retail
environment, our prime regional shopping centres continue to perform robustly.
Sir Robert Finch
Chairman"
Date: 31/03/2006 08:09:11 AM Produced by the JSE SENS Department
