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Workspace reports good progress

Workspace reports good progress

Workspace Group PLC has today announced its results for the six months ended 30 September 2011.   The Company provides space to some 4,000 small and medium sized enterprises across London.

Highlights for the six months ended 30 September 2011:

Financial Performance

·     Trading profit after interest up 15% to £7.6m (September 2010: £6.6m)

·     Profit before tax £16.9m (September 2010: £18.0m)

·     EPRA earnings per share up 7.3% to 5.9p (September 2010 (restated): 5.5p)

·     Interim dividend per share increased by 10% to 2.93p (September 2010 (restated): 2.66p)

·     Underlying property valuation up 2.2% (£16m) in the six months to £733m

·     Net bank debt reduced to £310m (Loan to value 42%).  Average cost of debt 5.2%

·     EPRA net asset value per share £2.90 (March 2011 (restated): £2.86)

Trading

·     Good level of customer demand with increased occupancy at our like-for-like properties now 87.4% (86.2% at March 2011)

·     Overall occupancy including refurbishment and redevelopment properties increased to 85.2% (83.6% at March 2011)

·     Total cash rent roll up 2.2% (£1.1m) in the six months to £50.0m

Property and Redevelopment Activity

·     Raised £63m (net of expenses) in a rights issue in July 2011 to accelerate investment in our portfolio for significant income and capital growth

·     A number of refurbishment projects underway with capital expenditure of £8m in the six months

·     First acquisition for £5m in our joint venture with BlackRock completed in October 2011

·     £9m of cash from disposals

Outlook

Commenting on the results, Harry Platt, Chief Executive said:

"During the period we have successfully driven occupancy and rent roll and accelerated our programme of refurbishment and repositioning initiatives.  We have also achieved good increases in property values without any benefit from yield movement.

We are mindful of the broader economic environment but continue to see, since the half year end, good customer demand and positive KPI's.  Further, our intensive management model enables us to respond quickly to both opportunity and challenges. With a strong balance sheet, experienced management team and attractive London property portfolio Workspace is well positioned for further growth."

Daniel Kitchen, Chairman, added:

"Workspace is a well managed business, soundly financed with a clear strategy.  The immediate priority is to ensure delivery of our plans set out at the time of our rights issue in July; we are making good progress here.  Given the trading results and positive lead indicators, we have increased the interim dividend by 10% to 2.93p per share, payable in February 2012.

We are in the process of appointing a replacement for Harry as Chief Executive and expect to be in a position to announce his successor early in the New Year and so ensure an orderly transition during the first half of 2012."


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