Hawtin PLC (the “Company” and the “Group”)
The following statement will be made by Richard Hayward, Hawtin’s Chief Executive at the Annual General Meeting to be held at 11.30 pm on 26 June 2008 at the Celtic Manor Hotel, Newport.
Shareholders will be well aware of the unusual and difficult conditions in the current property market. Since the credit crunch at the end of last year, property professionals have been dealing with its consequences. Many thought that an explosion of cheap assets would flood the market but that has not happened. Activity in the property market has become very thin and patchy – with opportunities available for those with insight and an acceptance of risk. It is unclear how long this will continue.
As stated in the Annual Report, Hawtin’s Strategy has had to adapt to the current market, adopting a less aggressive acquisition policy for the time being and undertaking a more aggressive management of existing assets. For example, Hawtin has been busy and creative in working to increase the potential of our largest single asset, the Millennium Plaza in Cardiff. At the 2007 Annual General Meeting, I explained that although the Plaza is relatively young as a property asset, there is tremendous potential within the footplate of the building.
The Company is very pleased to announce that it has recently negotiated heads of terms with a restaurant group which operates under the “China China” brand to grant a lease at a record price per square foot that will revitalise the leisure offering on the ground floor.
This new lease complements adjacent tenancies with Regents Inn who currently operate a bar/night club on the lower floors. The result is a regenerated leisure offering with increased income and the support for capital appreciation.
As Chief Executive, I have always believed that this location offers much more. The Board have evaluated a range of other options that complement or replace the leisure uses and the Company is currently marketing parts of the upper areas as a prestige Office Development with an alternative Hotel scheme. There is considerable interest from a number of potential tenants and some political support to enhance the city centre location by attracting a high profile office user. There is some way to go in securing all the components to achieve this, but our evaluations suggest considerable capital appreciation. You may have seen recently that Hawtin have acquired 100% control of Crown Investments, and this allows us greater flexibility in managing the prospects on the site.
The Board has not restricted its efforts to Millennium Plaza, having undertaken Asset enhancement programmes at two of our other properties, FKI and Aberaman. In both cases the marketability of vacant areas has been enhanced by splitting a large space into smaller letting units. The result will increase overall rental values and allow partial occupation.
I would also draw shareholders attention to an intangible asset not shown on our balance sheet – the undrawn Bank Facility. In these credit-crunch affected times, a committed facility of £27 million on attractive terms such as the Group’s facility with HBoS is invaluable and would be almost impossible to secure in today’s economic climate– it means that the Group has the wherewithal to take advantage of opportunities that may arise and we already have a number of thoughts in this respect.
I mentioned before the acquisition of the minority shareholding in Crown: shareholders should know that this was achieved through the issuing of Hawtin shares to an investment fund Tribeca that is managed by Delancey. We at Hawtin are pleased to have such a high profile shareholder.
Enquiries:
Hawtin PLC:
Stephen Morgan Tel:01633 682 131
Seymour Pierce Ltd:
John Depasquale /Matt Thomas Tel: 020 7107 8000