Urban Exposure losses widen as it winds down operations
By Josh White
Date: Tuesday 22 Sep 2020
(Sharecast News) - Urban Exposure reported a loss before tax of £24.1m in its first half on Tuesday, widening from a loss of £0.3m year-on-year.
The AIM-traded property finance company said its loss before tax for the six month period to 30 June, excluding exceptional items, was £6.3m, compared to a £0.0m profit in the first half of 2019.
During the period, the group had negative revenue of £2.0m recognised due to a reduction in fair values as a result of the uncertainty created by Covid-19, compared to positive revenue of £5.3m a year earlier.
Operating costs totalled £4.3m, down from £5.3m, excluding exceptional costs.
Exceptional costs totalled £17.8m, reflecting the write-down of goodwill and brand value due to the change in group strategy and costs associated with potential transactions.
The board proposed a distribution of around £26m to take place via a tender offer.
Basic losses per share came in at 15.14p, growing from £0.16p, while the firm's net tangible asset value was £121.7m, down from £135.2m 12 months prior.
The net tangible asset value per share was 77p, cash and cash equivalents per share totalled 12p, and loans receivable per share came in at 62p.
"Since 5 May, the group has been focussed solely on completing an orderly wind-down of its assets and operations to maximise the return of shareholder capital," the board said in its statement.
"On 19 June, the group estimated that a range of shareholder returns of between 70p and 83p per ordinary share was possible with 80% of proceeds expected to be returned within seven to 15 months."
Urban Exposure said that as of Tuesday, it was expecting shareholder returns to be within the range of 72p to 78p per ordinary share, with 90% of proceeds expected to be returned within 12 months.
"This range has been revised following a thorough review of all existing loan obligations and a number of refinancing deals undertaken or in progress to deliver value for shareholders.
"Following implementation of the group's stated wind-down strategy, the group has a cash balance of £51m at the publication date of this report of which it expects to return approximately £26m within the next two months via a tender offer.
"The total size of the distribution may increase should further loan redemptions occur prior to the announcement of the tender offer."
Any funding obligation that the group had, under the terms of existing loans, had been provided for in the company's cash projections, the board said.
At 0850 BST, shares in Urban Exposure were up 5.74% at 64.5p.
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