News Column

ICG-Longbow Senior Secured UK Property Debt Investments Profit Misses

April 28, 2014

Samuel Agini

LONDON (Alliance News) - ICG-Longbow Senior Secured UK Property Debt Investments Ltd Monday said annual profit was lower than expected at the time of its initial public offering in 2013, amidst increased competition in the sector.

Reporting maiden annual results since floating on the London Stock Exchange in February 2013, ICG-Longbow Senior Secured UK Property Debt Investments said it made a GBP1.3 million net profit between November 29 2012 and January 31 2014. Before tax, the company's profit was GBP1.4 million.

The company, which is managed by Longbow Real Estate Capital LLP, said profit for the 14 months is lower than anticipated at the time of its IPO because its investment rate was slower than expected, as the emergence of new lenders to the sector resulted in increased competition, which intensified in the second-half.

The company is tasked with an investment objective of constructing a portfolio of good quality, defensive, senior debt investments secured by first-ranking fixed charges, predominantly against UK commercial property investments. It said it is now fully invested and is on track to deliver its target annual dividend yield of circa 6.0% a year on the IPO issue price.

Having already paid a 0.5 pence first dividend for the period to the end of October 2013, ICG-Longbow Senior Secured UK Property Debt Investments declared Monday a second interim dividend of 1.25 pence.

In line with its dividend policy, ICG-Longbow Senior Secured UK Property Debt Investments said it expects to increase its dividend in the next quarter.

The total expense ratio for the period, calculated as total expenses for period as a percentage of net asset value at the end of the period, was 1.54%, including certain expenses the company said it doesn't expect to recur in the future.

NAV at the end of January was 98.79 pence per share.

Chairman Jack Perry said all of the loans within ICG-Longbow Senior Secured UK Property Debt Investments' portfolio continue to perform to expectation, adding that the board and the investment manager will continue to evaluate market conditions and borrower demand in order to identify opportunities to raise and deploy further capital.

While the proposals will be put forward at the company's forthcoming annual general meeting, Perry said the opportunity to deploy further capital at levels accretive to shareholders isn't currently foreseen because of increased competition.

"The company was created during one of the most prolonged property credit squeezes of modern times. It has fulfilled a valuable role in providing UK commercial and industrial real estate borrowers with much needed debt while providing investors with an attractive rate of return," Perry said.

"The board will closely monitor the performance of the portfolio together with applying tight control over on-going charges to ensure the company's fundamental objectives continue to be fulfilled," Perry added.

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Source: Alliance News

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