Conygar Investment Company PLC
Conygar Investment Company PLC

Conygar Investment Company PLC share price, company news, analysis and interviews

Conygar Investment Company plc (LON: CIC) aims to invest in property assets where they can add significant value using their property management, development and transaction structuring skills.

The Board currently comprises the Chief Executive, two Property Directors and two independent Non-Executive Directors of which one is Chairman. These demonstrate a range of experience and sufficient calibre to bring independent judgement on issues of strategy, performance, resources and standards of conduct which are vital to the success of the Company.

Conygar Investment Company

PORTFOLIO

Nottingham, The Island Quarter

Conygar acquired the 37 acre Island Quarter site in Nottingham City Centre in December 2016. The site was formerly the headquarters and laboratories of Boots, the chemists, and has been mostly vacant for over 25 years. An outline planning application was submitted in June 2018 and the resolution to grant planning permission for the mixed use scheme was granted by Nottingham City Council in April 2019.

Cross Hands, Carmarthenshire

Cross Hands is a recently constructed 100,000 square foot retail park in South West Wales.

The current tenants are Lidl UK GmbH , B & M Retail Limited , Iceland Foods Limited, Pets at Home Limited, Peacocks Stores Limited, Shoe Zone Limited, Costa Coffee, Jenkins Bakery and Dominos. A Burger King drive through restaurant is currently under construction and will be finished in the summer of 2020.

Haverfordwest, Pembrokeshire

Haverfordwest in Pembrokeshire is a development site with outline consent for 729 residential units and an implemented consent for 90,000 square foot of A1 retail.

Reserved matters consent was received in September 2019 for the first phase of 115 houses.

Holyhead, Anglesey

The Holyhead Waterfront scheme in Anglesey has outline consent for 325 houses, a hotel and 40,000 square foot of retail space.

We continue to work on the detailed design and reserved matters application in tandem with the marine consenting process and expect to submit all applications by the end of 2020.

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Conygar Investment Company PLC

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Conygar Investment company

Conygar Investment Company submits planning application for bio-science building

Conygar Investment Company PLC (LON:CIC) has submitted a detailed application for the next phase of The Island Quarter development in Nottingham. The application comprises a 23,123 sq.m. (249,000 sq.ft.) bioscience building, which includes both laboratory and office space.

Christopher Ware, Property Director of Conygar Investment Company, commented:

“We are delighted to submit this application for the next phase of development. Nottingham is already home to a large number of exciting businesses in the bioscience space and this scheme will be an excellent addition to the mixed-use development we are creating at The Island Quarter.”

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Conygar Investment Company

Conygar Investment Company granted planning for the next phase of The Island Quarter

The Conygar Investment Company PLC (LON:CIC) has announced that Nottingham City Council has passed a resolution to grant planning for the next phase of The Island Quarter.

This phase of the development comprises 247 BTR apartments, 223 hotel rooms, 400 co-working desks as well as a food and beverage provision.

Robert Ware, Conygar Investment Company Chief Executive, commented: “We are delighted that the Council have approved the plans for the next phase of our exciting project in Nottingham. This builds on our success in achieving permission for the student accommodation and the soon-to-open venue at Canal Turn”.

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Conygar Investment company

Conygar Investment Company net asset value increased by £12.44 million to £126.58 million

The Conygar Investment Company PLC (LON:CIC) have today provided interim results for the six months ended 31 March 2022.

Summary

·    Net asset value (“NAV”) increased by £12.44 million to £126.58 million (212.25p per share), including a £10.52 million uplift from the placing of 7,139,000 of the Company’s own shares.

·    NAV per share decreased by 5.16p per share to 212.25p as a result of 8.58p per share dilution from issuing shares at a discount, partly offset by a 3.42p per share increase from the £1.93 million profit realised in the period.

·    Total cash deposits of £30.66 million (51.41p per share).

·    No debt and no borrowings.

·    Development progressed for the first phase of the mixed-use project at The Island Quarter, Nottingham, planned for opening in the summer of 2022.

·    Disposal of the industrial units at Selly Oak, Birmingham, completed in December 2021, realising a net profit of £3.42 million.

·    Disposal of the retail park at Cross Hands, Carmarthenshire, for £18.28 million realising a £0.53 million surplus over the 30 September 2021 valuation.

·    A further planning application was submitted in October 2021 for the proposed mixed-use waterfront development in Holyhead, Anglesey, supplementing the outline consent granted in 2014.

·    A non-binding exclusivity agreement was entered into with Wholesale Fruit Centre (Bristol) Limited in connection with the potential acquisition of a 14.7-acre development at the Bristol Fruitmarket site in the St Philip’s Marsh area of Bristol.

Group net assets summary

31 Mar 2022£’m   31 Mar 2021£’m   30 Sept 2021£’m
Properties 99.34 62.24 108.44
Cash 30.66 23.93 13.66
Other 0.57 0.49 (0.66)
Provisions (3.99) (7.30)
Total 126.58 86.66 114.14
 
NAV per share 212.25p 163.97p 217.41p

Robert Ware, Conygar Investment Company Chief Executive commented:

“The soon to be opening up and ongoing development programme at The Island Quarter site in Nottingham in conjunction with the resurgence of interest in a nuclear capability in Anglesey leaves the Group well placed to benefit from the post-pandemic economic bounce and strong demand for high quality, sustainable, UK real estate, particularly in the residential rental market.

Although the further advancement of our development portfolio will require a substantial investment by third-parties we are confident that there is significant interest which will become clearer over the year.”

Chairman’s and Chief Executive’s statement

Results summary

The Group achieved a profit of £1.93 million in the period (year ended 30 September 2021: profit of £26.53 million). This arose from completion of the forward sale of our industrial units at Selly Oak, Birmingham, and the sale of our retail park at Cross Hands, Carmarthenshire, which gave rise to a combined net profit, before administrative and other operational costs, of £3.84 million. These sales, in addition to the placing of 7.14 million shares in December 2021, generated gross cash proceeds in the period of over £36 million.

Whilst this is a pleasing result, that has enabled the continued progression of our exciting mixed-use development at The Island Quarter site in Nottingham, it should be noted that the share placing at a discounted price of 150p, after adjusting for realised profits, has resulted in a net reduction of the Group’s net asset value per share in the period of 5.16p (2.37%) to 212.25p per share as at 31 March 2022 (30 September 2021: 217.41p).

The Island Quarter, Nottingham

Just over 5 years since we first acquired The Island Quarter site, we are delighted to see the first phase of this substantial regeneration project nearing practical completion with the food, beverage and events venue at Canal Turn to be fitted out over the coming weeks in advance of a planned opening in the summer.  

Canal Turn comprises an outside performance area, restaurants, bars, extensive events space for private hire and a rooftop terrace which will provide an exciting, new and unique destination for the city to be managed and operated by a local Nottingham team. The venue’s two restaurants, “Binks Yard” and “Cleaver & Wake”, will be led by the 2018 MasterChef: The Professionals winner and chef patron Laurence Henry. Binks Yard will provide an all-day dining, drinking and entertainment venue whilst the Cleaver & Wake restaurant will offer a modern dining experience using the best nationally sourced produce.

We anticipate that the detailed application for the plot adjacent to Canal Turn, which incorporates proposals for two hotels, to be managed by Intercontinental Hotels Group, co-working space, 247 build to rent apartments plus an extensive food and beverage offering, will be granted by the summer.

Furthermore, ground preparation works have been carried out for the now fully consented 700-bed student accommodation scheme to enable commencement of this development in the summer of 2022 and completion in good time for the September 2024 student intake.

We continue to progress the designs for subsequent phases and are in advanced discussions with potential lenders to finance both the student accommodation development as well as later phases of the project and expect to make announcements in that regard over the coming months.

For this Interim Report we have not sourced a third-party valuation for The Island Quarter site. The Conygar Board have, however, considered its fair value by reference to any changes in the assumptions set out in the reported 30 September 2021 valuation provided by Knight Frank LLP, progression of the project and the recoverability of costs incurred since that date. During the period, no planning permissions have been granted or buildings completed and whilst we recognise the impact that price inflation is currently having upon property construction costs, we are seeing these increases being offset by a corresponding uplift in market rents, particularly within the residential build to rent and student accommodation sectors. However, there have been significant cash outlays in the period to bring electricity to the site and progress the construction of Canal Turn. As such the fair value at 31 March 2022 has been increased by £11.91 million to £82.41 million to reflect the development costs incurred in the six-months since 30 September 2021.

Other projects

At Cross Hands, Carmarthenshire, we were able to benefit from the pandemic bounce in retail warehousing values by accepting an offer to purchase our retail park for net proceeds of £18.28 million. The sale, which completed in February 2022, generated a profit in the period, after final development and sale costs, of £0.42 million. Further capital profits of £3.51 million were recognised, by way of revaluation surpluses, in prior periods which, in addition to £1.22 million of post development rental surpluses, has resulted in a total profit from the park of £5.15 million.

The granting, by Birmingham City Council, of their consent to a student home scheme at our site at Selly Oak enabled completion of the sale to a specialist provider of student accommodation for gross proceeds of £7.04 million. The sale realised a profit in the current period, after costs, of £3.42 million in addition to £0.66 million of prior period rental surpluses realised since our acquisition of these industrial units in April 2018. 

At Holyhead Waterfront, Anglesey, the detailed application and marine licence applications, submitted in October 2021, for a proposed development to include a 250-berth marina, 259 townhouses and apartments, marine commercial and additional A1/A3 retail units, were validated in January 2022. We expect a determination by the Local Authority in the autumn of this year.

Whilst it is difficult to predict the impact that the ongoing war in Ukraine will have on the real estate sector, its occurrence, in conjunction with the global shift towards low carbon energy, has strongly influenced the Government’s desire for more UK sourced power. The release, in April 2022, of their Energy Security Strategy sets out proposals for the provision of greater energy independence and security, by way of supercharging the deployment of cleaner and more affordable energy. This includes the provision of a £120 million Future Nuclear Enabling Fund to progress a series of projects as soon as possible this decade, including the Wylfa site in Anglesey, where talks were already ongoing between the UK and Welsh Governments and US energy and engineering firms Westinghouse and Bechtel. 

If the UK and Welsh Governments eventually decide to support nuclear and / or other energy forms on Anglesey, our site on the Holyhead Waterfront and over 200 acres of currently brownfield but developable land at Rhosgoch and Parc Cybi are well positioned to support the significant residential and logistical provisions which will be required.

In December 2021, we announced that the Company had entered into a non-binding exclusivity agreement with Wholesale Fruit Centre (Bristol) Limited regarding the potential acquisition of a 14.7-acre development at the Bristol Fruitmarket Site in the St Philip’s Marsh area of Bristol, one mile to the east of Bristol Temple Meads. The initial agreement lasted for up to 5 months, which has now been extended to 24 May 2022. During the exclusivity period we will establish whether or not to proceed with the proposed acquisition. If the acquisition were to go ahead, it would be subject to us obtaining an agreeable planning permission for the site and as such the completion is unlikely to occur in the near term.

ESG Programme and electronic financial reporting

The impact that the real estate sector has on carbon emissions has been extensively reported and is increasingly affecting occupier and investor decisions. In order to guide our approach to sustainability for the development portfolio, the Board have established an ESG programme which forms a key part of each project and its constituent components – from project brief, through to design/specification, construction, operation and renovation. At all stages, the development, operations and asset management teams are required to assess their performance, innovate, evolve and perfect all practices against the ESG framework. Further details of the programme will be set out in the Group’s 2022 Annual Report.

As part of these arrangements, to avoid where possible the distribution in paper format of the Company’s Interim and Annual Report’s each year, the shareholders passed a resolution at the Company’s AGM in December 2021 to authorise the Company to serve notices or supply other documentation by electronic means. For those individual shareholders that specifically requested to continue to receive such documents in paper format the arrangements will continue as before. For all others these reports will be made available, as soon as practically possible after the Group’s results are announced each period, via the Company’s website.

Share placing

At the Company’s Annual General Meeting, held on 20 December 2021, resolutions were passed to enable the Company to complete the placing of 7,138,998 Ordinary shares of 5p each at a placing price of 150p per share, to enable the further progression of The Island Quarter project. This includes the continued development and fitting out of the first phase of the scheme at Canal Turn, bringing a new electricity substation to the site and, later this year, to part fund the equity component of the student accommodation development.

The premium received from each placing share over their 5p nominal value, net of fees paid in connection with the placing, resulted in a £10.16 million credit to the Company’s share premium account. At a General Meeting of the Company on 28 March 2022 a further resolution was passed to enable the cancellation of the share premium account, subject to approval of the Court, such that the amount cancelled can be credited to a distributable reserve. On 22 April 2022, an application was submitted to the Court to request the cancellation which is expected to be considered in late May 2022.

Outlook

The soon to be opening up and ongoing development programme at The Island Quarter site in Nottingham in conjunction with the resurgence of interest in a nuclear capability in Anglesey leaves the Group well placed to benefit from the post-pandemic economic bounce and strong demand for high quality, sustainable, UK real estate, particularly in the residential rental market.

Although the further advancement of our development portfolio will require a substantial investment by third-parties we are confident that there is significant interest which will become clearer over the year.

N J Hamway                                                   R T E Ware

Chairman                                                        Chief Executive

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Conygar Investment company

Conygar Investment sell Cross Hands retail park for £18.25 million

The Conygar Investment Company PLC (LON:CIC), the property investment and development group, has today announced that it has completed the disposal of its retail park in Cross Hands, Llanelli for a net consideration of £18.25 million. The net proceeds are expected to be utilised in progression of the Company’s development at The Island Quarter site in Nottingham.

Freddie Jones, Director at Conygar Investment said, “We are delighted to have exited our retail park development. Since we purchased the 10-acre site in 2015 we have constructed and fully let the 92,000 sqft scheme to leading operators including Lidl, B and M Retail, Iceland’s Food Warehouse, Costa Coffee and Pets at Home with annual net rental income of £1.3 million. The sale is at a £0.5 million premium to the September 2021 year end valuation which reiterates our strategy of selling completed developments.”

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Conygar

Conygar sell Selly Oak property generating a trading profit of £3.6 million

Conygar Investment Company PLC (LON:CIC), the property investment and development group, has announced that it has completed the disposal of its industrial units in Selly Oak, Birmingham.

As previously announced, contracts were exchanged in 2019 for the sale of the Selly Oak property, on a subject to planning basis, to a specialist provider of student accommodation. The sale has now completed for £7.17 million compared to a book value of £3.57 million.

Freddie Jones, Director of Conygar said “We are delighted to have exited this property generating a trading profit of £3.6 million, while also having benefited from the rental income received, since our strategic purchase of the units in 2018”.

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Conygar Investment company

The Conygar Investment Company placing to fund next phase of Island Quarter site, Nottingham

Conygar Investment Company plc (LON:CIC) has announced its intention to conduct a placing of c.6.7 million new Ordinary Shares (“Placing Shares“) at a price of 150 pence per share, raising gross proceeds of c.£10 million. 

Highlights

·      Proposed issue of c.6.7 million Placing Shares under the Placing at 150 pence per Placing Share, with the placing of any Placing Shares in excess of 5 million Placing Shares being conditional on certain resolutions being passed at the Company’s Annual General Meeting to be held  at 4.00 p.m. on 20 December 2021.

·      The Placing Price of 150 pence per Placing Share represents:

o  a discount of 7.7 per cent. to the Company’s closing share price of 162.5 pence per Ordinary Share on 16 December 2021 (being the last business day prior to this announcement); and

o  a discount of 31.0 per cent.  to the Company’s net asset value per Ordinary Share of 217.4 pence per Ordinary Share as at 30 September 2021. 

·      The Company has a number of potential uses for the proceeds from the Issue, all of which will assist with progressing The Island Quarter site in Nottingham. These include funding the completion of the construction for the first phase of the scheme, bringing a new electricity substation to the site, funding the equity component of the student accommodation scheme and potentially progressing the design and planning for an office scheme. More details on these are set out below.

·      It is the intention of the Directors to subscribe for 704,000 Placing Shares at the Placing Price in the Placing.

·      The Placing will be conducted through an accelerated bookbuild, which will be launched immediately following release of this announcement (the “Bookbuild“).  Liberum Capital Limited (“Liberum“) is acting as sole bookrunner in connection with the Placing (the “Bookrunner“).

·      The Placing Shares will represent approximately 12.8 per cent. of the Company’s existing issued share capital, assuming 6.7 million Placing Shares are issued in total.

·      Admission of the Placing Shares to trading on AIM is expected to be on or around 22 December 2021.

Robert Ware, CEO of Conygar, commented on the Placing:

The Placing we are announcing today is to fund part of the next phase of the exciting 36 acre Island Quarter site in Nottingham. There are a number of potential uses for the proceeds, including bringing a new electricity substation to the site, funding the equity component of the student accommodation scheme and potentially progressing the design and planning for an office scheme. Significant progress has already been made on The Island Quarter, with planning permission granted for over two million square feet to include new homes, grade A office space, a creative market, a lifestyle hotel, retail units, student accommodation and associated public realm.

Background

Since acquiring The Island Quarter in 2016, the Company has made significant headway in developing the concept and strategy and over the last year has submitted three detailed planning applications for the early phase developments. Two of these have subsequently been granted with the third, which includes two hotels, residential apartments and co-working space, expected to be considered by the planning committee in early 2022. The detailed applications granted to date have enabled the Company to commence the construction of the first phase, which includes a 21,500 square foot food and beverage-led building, planned for completion by late spring 2022, and to initiate the on-site preliminary groundworks for a c.700-bed student accommodation scheme.

Use of proceeds

The Island Quarter project is advancing quickly and there are a variety of uses for the proceeds from the Placing to assist with progressing the site. The first phase, which is currently under construction, is expected to be completed in late spring 2022. The cost to complete this development is c.£6 million.

The Company is also currently bringing a new electricity substation to the site as there is not enough capacity in the local network for anything beyond the first phase. The anticipated cost to complete this and ensure that the entire site is capable of supporting new buildings is expected to be c.£5 million.

The Company’s detailed application for student accommodation has been granted and the Company is expecting to be able to commence that development in 2022. The Company has also received several offers of bank finance for the construction and will determine how much of the placing proceeds to deploy as equity in this scheme next year.

The Company is also in discussions with a number of businesses for office space totalling 250,000 square feet. Should these negotiations progress, it is expected that part of the net proceeds of the Placing will be used to fund the design and planning processes as required.

Any additional cash requirements in connection with the above projects, in excess of the proceeds from the Placing, will be covered by funds from the sale of other assets.

As at 16 December 2021 (the latest practicable date prior to this announcement), the Company had c.£7.0 million of cash and requires further funding for the Island Quarter.

General Nottingham update

Since 30 September 2021, there has been steady progress on The Island Quarter. The construction of the first phase has continued and is still on track to be completed in late spring 2022. Following the granting of the permission for the student accommodation, the Company has focused on finalising the Section 106 Agreement and liaising with contractors to ensure a start on site in 2022. The Company is also in discussions with a number of organisations about taking commercial space on the site, and will look to progress those as soon as possible.

Numerous discussions have occurred, several of which are ongoing and some of which have just commenced, involving potential investors, potential partners and potential occupiers for all or different parts of the development. At present, none of these discussions have reached an advanced stage.

Update on other existing projects

Cross Hands, Carmarthenshire

As announced in the Company’s results for the year ended 30 September 2021, the retail park at Cross Hands is fully occupied comprising a strong and diverse tenant base including Lidl, B&M Retail, Costa Coffee, Iceland Foods, Domino’s Pizza, Pets at Home, Burger King, Snap Fitness and One Below which produces an annual rent roll of £1.38 million.

As the park is now fully income producing, the Company is considering marketing the park for sale in early 2022.

Holyhead Waterfront, Anglesey

The Company is awaiting the determination of its further detailed design and reserved matters application submitted in October 2021.

Selly Oak, Birmingham

As previously disclosed, contracts have been exchanged for sale to a specialist provider of student accommodation. The local authority issued its agreement to the Section 106 Agreement on these two industrial units and accordingly their planning consent on 12 November 2021. The sale agreement is now unconditional and the Company currently anticipates that the student provider will complete their acquisition by the end of 2021, at a price materially above the Company’s current book value for the asset.

Haverfordwest, Pembrokeshire

The construction of the 300-metre spine road and associated infrastructure will be completed by the end of 2021. The Company’s application to reduce the costs payable under the Section 106 Agreement was approved by the planning committee on 14 December 2021. All section 106 payments are to be removed for the first phase of 115 houses and subsequent phases will be considered in a similar fashion as they come forward. These amendments will be formally documented in due course.

Parc Cybi and Rhosgoch, Anglesey

Nothing new to report. 

Bristol option agreement

The Company has signed an exclusivity agreement to acquire the land at The Wholesale Fruit Centre in Bristol. This is a site of c.15 acres to the east of Temple Meads Station. The transaction is subject to full due diligence and the granting of a suitable planning permission. At present, the Company is only committed to £60,000 in legal costs but assuming the due diligence is successful a planning application will follow which is likely to cost in the region of £1.5m and is expected to take nine months to be submitted.

Further information on the Placing

The Company is proposing to raise gross proceeds of c.£10 million through a placing of c.6.7 million Placing Shares with new and existing investors at the Placing Price of 150 pence per share. 

The Placing Price of 150 pence per Placing Share represents:

·      a discount of 7.7 per cent. to the Company’s closing share price of 162.5 pence per Ordinary Share on 16 December 2021 (being the last business day prior to this announcement); and

·      a 31.0 per cent. discount to the Company’s net asset value per Ordinary Share of 217.4 pence per Ordinary Share as at 30 September 2021. 

Liberum Capital Limited, as placing agent for the Company (“Liberum“), will use its reasonable endeavours to place the Placing Shares with institutional and other investors at the Placing Price. The Directors reserve the right, in conjunction with Liberum and subject to seeking any necessary shareholder approvals, to increase the size of the Placing.

The Placing will be conducted by way of a bookbuilding process which will be launched immediately following this Announcement, in accordance with the terms and conditions set out in Appendix 1 below, and is expected to close by 5.00 p.m. on 17 December 2021. Liberum, in consultation with the Company, reserves the right to close the bookbuilding process earlier or later at its discretion.

Details of the number of Placing Shares and the approximate gross proceeds of the Placing will be announced as soon as practicable after the closing of the Placing. 

The Placing is not being underwritten.

The placing of up to 5 million Placing Shares pursuant to the Placing will use the existing shareholder authorities available to the Company which were granted by Shareholders at the 2020 AGM and any placing of Placing Shares pursuant to the Placing in excess of 5 million Placing Shares will use the shareholder authorities proposed to be made available to the Company at the 2021 AGM and will therefore be conditional upon the approval of the relevant resolutions by Shareholders at the 2021 AGM. The Placing is conditional upon Admission of the Placing Shares to trading on AIM, which is expected to occur on or around 8.00 a.m. on 22 December 2021.

The Placing Shares issued pursuant to the Placing will, when issued, be credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares including the right to receive all dividends and other distributions declared, made or paid after their date of issue.

Directors’ participation in the Placing

The Directors intend to participate in the Placing as follows:

Director No. of Placing Shares
Nigel Hamway 100,000
Bim Sandhu 392,500
Robert Ware 147,500
Freddie Jones 15,000
Christopher Ware 34,000
David Baldwin 15,000

Expected timetable

Placing opens 7:00 a.m. on 17 December 2021
Placing closes By 5.00 p.m. on 17 December 2021
Result of Placing Announced By 20 December 2021
2021 AGM 4.00 p.m. on 20 December 2021
Admission of Placing Shares 8.00 a.m. on 22 December 2021

Each of the times and dates above refer to London time and are subject to change by the Company. Any such change will be notified to Shareholders by an announcement on a Regulatory Information Service.

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Conygar Investments Bristol Fruitmarket

Conygar Investment begin talks for potential acquisition of a 14.7 acres development

The Conygar Investment Company PLC (LON:CIC) has announced today that it has entered into a non-binding exclusivity agreement with Wholesale Fruit Centre (Bristol) Limited regarding the potential acquisition of a 14.7 acres development at the Bristol Fruitmarket Site in the St Philips Marsh area of Bristol, one mile to the east of Bristol Temple Meads.

The initial agreement lasts for up to 5 months, during which Conygar Investment will establish whether or not to proceed with the proposed acquisition.

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Conygar Investment company

Conygar Investment Company NAV increased by £25.3 million (28.5%)

Conygar Investment Company Plc (LON:CIC) have today published preliminary results for the year ended 30th September 2021.

·    Net asset value increased by £25.3 million (28.5%) to £114.1 million (217.4p per share).

·    Total cash deposits of £13.7 million (26.0p per share).

·    No debt and no borrowings.

·    £29.2 million surplus on valuation of the Group’s investment properties, comprising a £28.7 million uplift at The Island Quarter, Nottingham, and £0.5 million uplift at Cross Hands, Carmarthenshire. The combined surplus amounts to an increase of 55.6p per share before other net operational and administrative costs. At The Island Quarter, the resulting £70.5 million valuation equates to approximately £2 million per acre.

·    Development progressing for the first phase of the mixed-use development at The Island Quarter and resolution passed to grant planning permission for a 700-bed student accommodation scheme. 

·    Detailed planning application submitted in January 2021 for the next phase of The Island Quarter development which includes a hotel, to be managed by Intercontinental Hotels Group, residential rental apartments and co-working space.

·    A further planning application was submitted in October 2021 for the proposed waterfront development in Holyhead, Anglesey, supplementing the outline consent previously granted in 2014, which includes a 250-berth marina, 259 townhouses and apartments and associated retail and public realm.

·    Bought back 1.09 million shares (2.0% of ordinary share capital) at an average price of 111.5p per share.

Group net assets summary        

   30 September 2021 Per share  30 September 2020 Per share
  £’m p £’m p
Properties 108.4 206.6 56.2 104.9
Cash 13.7 26.0 32.1 60.0
Provisions (7.3) (13.9)
Other (0.7) (1.3) 0.5 0.9
Net assets 114.1 217.4 88.8 165.8

Robert Ware, Conygar Investment Company Chief Executive commented:

“The speed and effectiveness of the UK’s vaccination programme has enabled a quicker and stronger economic recovery than many commentators predicted. This success has been mirrored in the real estate sector with commercial property values increasing in the last year, on average by approximately 7%, driven by higher transaction volumes and the hardening of yields across much of the market. Our results have benefited from this economic bounce and reflect a significant improvement to those reported in the previous year.

Although we are acutely aware that a sustained economic recovery remains far from assured, and that the expectations within the real estate industry have changed markedly over recent years, we are increasingly confident that our property portfolio is well positioned to benefit both from the renewed market optimism and significant post COVID-19 social changes.”

Chairman’s & chief executive’s statement

Results summary

We present the Group’s results for the year ended 30 September 2021.

The Group’s net asset value per share has increased by 51.6p (31%) in the year to 217.4p as at 30 September 2021 (2020: 165.8p). The profit before tax, which includes a £29.2 million unrealised surplus from the revaluation of our investment properties, was £28.2 million (2020: loss of £8.2 million).

As at 30 September 2020, the Group’s investment in The Island Quarter, Nottingham, was reported at cost as the fair value at that date was not readily determinable. However, the substantial progress made during the year to corroborate the project’s design, market comparables and development cash flows, as well as the significant progress made on planning and the commencement of development, has enabled this 36-acre site to be more reliably valued by Knight Frank LLP as at 30 September 2021.

The resulting valuation of £70.5 million, which represents a £28.7 million (69%) surplus over cost, provides support and justification for the direction of travel taken to date as we start to unlock, for the benefit of all stakeholders, the full potential of a project which will, in due course, provide an exciting new destination as well as substantial investment and employment opportunities for the city of Nottingham. Further details of the basis and valuation sensitivities are set out in note 12.

Since acquiring The Island Quarter in 2016, we have made significant headway in developing the concept and strategy and over the last year have submitted three detailed planning applications for the early phase developments. Two of these have subsequently been granted with the third, which includes two hotels, residential apartments and co-working space, expected to be considered by the planning committee at the end of 2021. The detailed applications granted to date have enabled us to commence the construction of the first phase, which includes a 21,500 square foot food and beverage-led building, planned for completion by Easter 2022, and initiate the on-site preliminary groundworks for a 700-bed student accommodation scheme which we hope to have operational for the September 2023 university intake.

In addition, the valuation of our retail park at Cross Hands, Carmarthenshire, has increased in the year by 7.6% from £16.5 million at 30 September 2020 to £17.8 million at 30 September 2021, in line with the increase in capital values reported across the retail warehousing sector.

Retailers with a predominantly out-of-town presence have been much better protected from the rise of online retailing than those with a more traditional high street focus where click-and-collect, larger car parking provisions and the drive-to convenience have proved more desirable, as highlighted by their higher footfall throughout the pandemic and quicker recovery post-lockdowns.

At our retail park in Cross Hands, from which over 70% of the Group’s rental income is currently derived, we have collected 97% of the rents receivable in the year which reduces to 92% for the Group as a whole. Of the remainder, 2% are expected to be received in full by the end of the calendar year, 1% are on deferred payment terms to be settled in full by March 2022 and 5% have been provided for in these financial statements.

This is a pleasing result, particularly given the volatility in the retail sector throughout the pandemic, which confirms the strength and adaptability for the vast majority of the Group’s tenants. 

During the year we have also made good progress on the rest of the portfolio, the brief highlights of which are set out below.

At Holyhead Waterfront in Anglesey we have submitted a further application, to supplement the outline consent granted in 2014, for a waterfront development to include both residential apartments and a 250-berth marina, which we are very hopeful will provide a catalyst for the regeneration of Holyhead.

Interest continues, from the renewables sector, in our 203-acre site at Rhosgoch, Anglesey. However, growing concerns about the capacity for the UK’s existing nuclear capability to phase out gas power and meet the government’s net zero targets have reopened the possibility for at least one more large scale nuclear project this parliament. Whilst exploratory talks continue between the UK government and various operators, for a possible nuclear capability on the Isle of Anglesey, we have not progressed the renewables option for our sites at Rhosgoch and Parc Cybi as they, in addition to Holyhead, would be ideally located to support the infrastructure required for such a project.

As previously reported, we exchanged a conditional contract in 2019 to sell our industrial property in Selly Oak, Birmingham, to a specialist provider of student accommodation. The conditionality within the agreement requires, in addition to other matters, the granting of a permission on the site for a student accommodation scheme which was duly obtained, subject to agreeing the section 106, in September 2021. This we hope will be the catalyst for the completion of the property’s sale in the coming months.

Elsewhere, we are completing the construction of a spine road and associated drainage at Haverfordwest in Pembrokeshire to open up the site for future development and have sold two of our smaller development sites at King’s Lynn, Norfolk and Fishguard Lorry Stop in Pembrokeshire.

Cash flow

The net cash outflow in the year was £18.5 million, including £16.9 million incurred to progress our property developments. As at 30 September 2021, the Group has available cash deposits of £13.7 million, much of which is allocated to the implementation of essential infrastructure and completion of the first phase development at Nottingham. However, in order to further progress our pipeline of development projects, in particular The Island Quarter, we will need to raise substantial amounts either as debt, through asset sales or from joint ventures and we are in advanced discussions on a number of fronts in that regard.      

Dividend

The Board recommends that no dividend is declared in respect of the year ended 30 September 2021. More information on the Group’s dividend policy can be found within the strategic report.

Share buy back

During the year, the Group acquired 1,092,000 ordinary shares, representing 2.0% of its ordinary share capital, at a cost of £1.22 million which equates to an average price of 111.5p per share. As a result of the buy backs, net asset value per share has been enhanced by 1.1p per share. The Group will seek to renew the buy back authority of 14.99% of the issued share capital of the Company at the forthcoming AGM. We consider the buy back authority to be a useful capital management tool and will continue to use it when we believe the stock market value differs too widely from our view of the intrinsic value of the Company.

Board change

We are pleased to welcome David Baldwin to the Board. David was appointed as Finance Director on 10 May 2021 having been with the Company for five years as Financial Controller and also, since 6 April 2020, as Company Secretary.

Outlook

The speed and effectiveness of the UK’s vaccination programme has enabled a quicker and stronger economic recovery than many commentators predicted. This success has been mirrored in the real estate sector with commercial property values increasing in the last year, on average by approximately 7%, driven by higher transaction volumes and the hardening of yields across much of the market. Our results have benefited from this economic bounce and reflect a significant improvement to those reported in the previous year.

Although we are acutely aware that a sustained economic recovery remains far from assured, and that the expectations within the real estate industry have changed markedly over recent years, we are increasingly confident that our property portfolio is well positioned to benefit both from the renewed market optimism and significant post COVID-19 social changes.

N J Hamway                                                                         R T E Ware

Chairman                                                                               Chief Executive

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Interviews

Conygar Investment Company

Conygar Investment Company CEO Robert Ware says The Island Quarter ‘most exciting project ever been involved in’

Conygar Investment Company plc (LON:CIC) CEO Robert Ware joins DirectorsTalk to discuss the detailed planning at The Island Quarter. Robert talks us through the scheme, the site and the application, explains what attracted his to Nottingham, discusses the InterContinental Hotels Group agreement, other items in the portfolio and what investors can look out for over the coming months.

https://vimeo.com/497913211

Conygar Investment Company acquired the 37 acre Island Quarter site in Nottingham City Centre in December 2016. The site was formerly the headquarters and laboratories of Boots, the chemists, and has been mostly vacant for over 25 years. An outline planning application was submitted in June 2018 and the resolution to grant planning permission for the mixed use scheme was granted by Nottingham City Council in April 2019.

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Conygar Investment Company PLC

INTERVIEW: Conygar Investment Company Well positioned to capitalise on future opportunities

Conygar Investment Company Plc (LON:CIC), property investment and development group dealing primarily in UK property, announced preliminary results for the year ended 30 September 2018. Robert Ware, CEO and Ross McCaskill CFO of Conygar joined DirectorsTalk to discuss the results. Ross talks us through the key highlights of the results, the key areas in the development pipeline, further opportunities and the criteria they look for.

https://vimeo.com/303043165

The Conygar Investment Company PLC is an AIM quoted property investment and development group dealing primarily in UK property. The group aims to invest in property assets where we can add significant value using our property management, development and transaction structuring skills.

Robert Ware, Conygar Investment Company PLC Chief Executive, commented:

“Significant progress and change has occurred over the year. With the sale of our holding in Regional REIT and the sale or forward sale of certain assets, our balance sheet is now stronger than a year ago, consisting only of our properties and cash reserves, with no debt. We have submitted outline planning for the Nottingham City Centre site, taken full control of the Holyhead Waterfront development, are delivering our properties under construction and are also well positioned to capitalise on other opportunities when they arise.”

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Conygar Investment Company PLC

INTERVIEW: Miton Group Increase holdings in Conygar Investment Company

Conygar Investment Company Plc (LON:CIC) CFO Ross McCaskill talks to DirectorsTalk about the further investment from Miton Group (LON:MGR). Ross shares his thoughts on why Miton are increasing their position in the company and explains how the Nottingham project is progressing. Miton now hold a 15.12% interest in the company.

https://vimeo.com/264590018

 

The Conygar Investment Company PLC  is an AIM quoted property investment and development group dealing primarily in UK property. The group aims to invest in property assets where it can add significant value using it’s property management, development and transaction structuring skills.

The business operates three major strands being, property investment, property development and investment in companies which trade or invest in property or hold substantial property assets. The property portfolio and the investment in Regional REIT Limited generate cash flows sufficient to maintain the Group’s administrative costs while at the same time we are creating a pipeline of investment properties and development projects that are well positioned to deliver good returns in the medium term. We continue to focus upon positive cash flow and are prepared to use modest levels of gearing to enhance returns. Assets are recycled to release capital as opportunities present themselves and we will continue to buy back shares where appropriate. The Group is content to hold cash and adopt a patient strategy unless there is a compelling reason to invest.

Our strong balance sheet, with cash reserves and no debt, places us in a good position to take advantage of opportunities as they arise and we will make further acquisitions if it makes sense to do so. In the meantime, we will work hard to deliver the projects and investments we currently hold.

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Conygar Investment Company PLC

INTERVIEW: Conygar Investment Company – Opportunities

Conygar Investment Company Plc (LON:CIC) CEO Robert Ware talks to DirectorsTalk about the opportunities at its Nottingham and Anglesey sites and Roberts thoughts on regional commercial property in the UK and the market over the next 6-12 months.

https://vimeo.com/252369416

The Conygar Investment Company PLC (“Conygar”) is an AIM quoted property investment and development group dealing primarily in UK property. The group aims to invest in property assets where we can add significant value using our property management, development and transaction structuring skills.

As at 6 September 2017, the company’s issued share capital comprises 67,126,435 ordinary shares of 5p each excluding 32,587,688 shares held by as treasury. All shares carry voting rights and are free of any restrictions on transferability.

As far as Conygar is aware, approximately 10.9 per cent. of the Company’s issued share capital is not in public hands.

 

The Company has been notified of the following significant shareholders:

 MITON GROUP LTD  8,916,884  13.28%
 MAJEDIE ASSET MANAGEMENT LTD  6,216,727    9.26%
 ROBERT WARE  4,500,000    6.70%
 BIM SANDHU  3,950,000    5.88%
 COVE INVESTMENT PARTNERS LLP  3,146,369    4.69%
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Question & Answers

Conygar Investment Company PLC

Conygar Investment Company PLC Q&A: Preliminary Results (LON:CIC)

Conygar Investment Company PLC (LON:CIC) Chief Executive Officer Robert Ware and Chief Financial Officer Ross McCaskill caught up with DirectorsTalk for an exclusive interview to discuss their preliminary results.

 

Q1: You’ve just published your preliminary results for the year ended 30th September, quite a few changes have occurred over the year. Can you talk us through what you consider to be the key highlights?

A1: One of the key highlights is the fact that we’ve realised £25.5 million from the sale of the REIT shares, obviously that crystallises all of the investment property portfolio for sale now.

Other key points would be the planning application which we submitted to Nottingham City Council for the planning application for over 2 million square feet for a mixed use scheme there in the city centre.

In addition, we’ve sold and forward sold a number our investment properties under construction and I think that’s a key development to the year so far.

 

Q2: Even though you wrote down two properties, the balance sheet looks strong with cash deposits of £49.3 million and construction and development totalling around £70 million. Can you outline the key areas in the development pipeline that Conygar Investment Company will be focusing on?

A2: I would say, again, to reiterate the fact that Nottingham is probably the most exciting project in the portfolio but in addition to that we have some very exciting projects in North Wales which will be very successful if the nuclear power station goes ahead. If it doesn’t, we will go back to our original plan which was to build some flats for tourism in Holyhead.

We then have another site in Rhosgoch that’s 203 acres, we acquired that about 3 or 4 years ago, but it was only about £3 million so it wasn’t an expensive price. Horizon Nuclear Power have an option on that land and if the nuclear power station goes ahead, that could house many workers, it can have many different uses so that’s another key area.

We’ve also acquired Selly Oak in the year so that’s a new property into the portfolio, again this has some redevelopment opportunities but at the moment we’re collecting rents so that’s quite good that we’ve got income there.

 

Q3: Now, I know you’re looking for other opportunities, do you have you eyes on anything at the moment?

A3: We are looking at some things, I can’t divulge what they are at the moment but there are some very interesting opportunities around. I think, given where we are in the market, we’re at the end of the cycle, there are very interesting opportunities coming on line now, they key is to find the right one and use the cash sensibly.

 

Q4: So, what is the criteria when Conygar Investment Company you look for these opportunities?

A4: We don’t want to gamble so we would look for opportunities where we would basically buy the land or properties cheaply and we could have multiples of our capital, that’s the key criteria for us. We’re not looking for long-term income or anything like that on the whole, we’re looking at opportunities where we can make the capital work hard for us if you use our transaction skills to crystallise significant return.

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Conygar Investment Company PLC

Conygar Investment Company PLC Q&A with CFO Ross McCaskill (LON:CIC)

Conygar Investment Company PLC (LON:CIC) Chief Financial Officer Ross McCaskill caught up with DirectorsTalk for an exclusive interview to discuss Miton Group’s increased stake and the progress of their Nottingham project

 

Q1: Ross, we’ve seen this morning that Miton have increased their stake, presumably you’re happy that they’ve done so, what are your thoughts there?

A1: We’re obviously very happy. Miton Group PLC (LON:MGR) are a very successful fund management group, they’re looking for strong long-term performance and they’re a value investor.

They’ve been a long-term support of Conygar and we’re very happy that they’ve increased their stake over 15% now hold nearly 9.8 million shares in us. I think they see the long-term value in us because we’re trading at about 25%-26% discount to the last reported NAV per share of 203p so hopefully they’ll continue to support us for the long-term.

 

Q2: How is the Nottingham project progressing?

A2: It’s progressing quite well, we’re working hard on trying to get the planning application submitted, we’re hoping to get that in in June.

Just to recap, this is a very exciting opportunity to regenerate the city centre, we bought 37 acres in Nottingham city centre by the train station for £13.5 million. We’re hoping to submit an application for over 2 million square feet of mixed use space which can include a university faculty, offices, creative trade; which is going to be something like Camden Market or Borough Market, and in additional we’ll create private residential flats; PRS schemes, and student housing.

So, it’s a very exciting project overall.

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Conygar Investment Company PLC

Conygar Investment Company PLC Q&A with CEO Robert Ware (LON:CIC)

Conygar Investment Company PLC (LON:CIC) Chief Executive Officer Robert Ware caught up with DirectorsTalk for an exclusive interview to discuss the opportunities at their Nottingham site, the impact of a nuclear power station in Anglesey and his thoughts on the market over the next 6-12 months

 

Q1: For those that don’t know, Conygar Investment Company are a property and investment group dealing mostly with the UK property. Can you tell us about your Nottingham site and the opportunity there?

A1: In December last year, we managed to acquire 37 acres in the middle of Nottingham town centre. The exciting bit about this piece of land is 25 years ago it was the Boots laboratories and headquarters and when Boots moved out of the city centre to the outer towns and subsequently to Switzerland, basically it’s a brownfield site with a lot of road over it. Various previous owners in that 25 years have tried to build all sorts of wonderful things on it, huge great shopping malls, Tesco superstores and whatever and basically, I think at the end of the day the bank got fed up and put it up to be sold at the end of last December which we purchased it.

So, the 37 acres we intend to submit outline planning permission for over 2 million square feet of a mixture of apartments, student housing, offices, leisure uses, obviously a lot of open space and areas for people and a new faculty for one of the universities. So, it’ll be one of those sites that’s just basically property for people to use rather than try to engineer something that perhaps locals don’t want.

The outline planning should be in by Easter and then as we’re with the council, and have done for more than a year now, hopefully there won’t be too many issues from that and we can get on and start to get tenants and therefore start to get the detailed planning and build things that people want.

 

Q2: Just coming away from Nottingham, in Anglesey there’s talk of a nuclear power station there, how would that impact Conygar Investment Company?

A2: These talks about Hitachi have been going on for some time and obviously with Hinkley Point and Sellafield there’s an awful lot of controversy around nuclear at the moment let alone the pricing of it.

It would seem that Hitachi have spent an awful lot of money and their reactors apparently passed all the atomic research tests and audits that have to occur, and it passed just before Christmas.
So, the argument as you read in the press for Hitachi and our government to argue about who is paying for what, and whether if the government actually guarantees something, whatever that is I’m not sure, that therefore the price of the firm would come down. I think the point about Hinkley Point is that the government stood away, allowed utter market forces to take control so basically, in the spreadsheet everybody put all sorts of contingent liabilities that may actually mean that the price is higher than it should be. So, I think the argument is about how much our government guarantees or supports in the process.

As far as Conygar are concerned, the island of Anglesey only has a population of 66,000, the temporary workers will be around 9,000 at peak, they think over the 7/8-year period, they’ll be 6-7 every year plus then all the people that’ll be working on it for the next 62.5 years which is apparently the life of the nuclear power station when it starts.

So, we’ve got 200 brownfield acres, about 6 miles from the potential new nuclear site and Hitachi have that site under option from us for a period of time, there’s huge areas outside of Holyhead port, land that we own there, and again Hitachi have got some options over that land. Separately, Conygar and our partners Stena have a large residential development on the waterfront.

So, basically for the island of Anglesey, the day that they say yes, and they go ahead with it i.e. it gets its financing, I think will be transformational for the island.

 

Q3: Finally, what are your thoughts on regional commercial property in the UK and the market over the next 6-12 months?

A3: Well, I think our view is that it’s pretty patchy, there’s going to be one or two areas where there’s still going to see rental growth and that’ll be the Amazon-style operators who are looking for drop-off points really and then to have the smaller vans taking whatever we all buy around to our homes or offices or wherever we order it.

I think that high street retail we haven’t seen the full impact yet of the internet, it’s going to worse for the high streets, so I think they’re going to become very specialist areas which means high street shops generally are still going to come down in value, we believe.

I think there are specialist operators, successful ones that are out there growing at the moment, the ones that we see in those areas; B&M which is a cracking company, the Premier Inn is still expanding, Dunelm, there are one or two that are really growing. Lots have put their plans on ice so M&S Foodhall’s under their new management they’re waiting to see what they want to do, Next have reduced some of their pipeline of actually building properties rather than selling it all through the internet. So, I think it’s all patchy everywhere.

The wildcard is London with the RESI that’s obviously falling off at the moment, in my view due to the high stamp duty rather than any discussion over Brexit but RESI outside of London seems to be more positive than within so I think it’s all over the place.

We saw just before Christmas the Hammerson/Intu merger which for somebody who knows a little bit about it, it looks pretty defensive to me. I think some of those larger shopping centres, unless they’re absolutely perfect, are going to get hammered as far as valuation is concerned and actually any rental growth because I can’t see where it’s going to come from.

So, that doesn’t really answer the question other than I think it’s patchy and all over the place. The key with anybody investing is are the tenant going to pay the rent, if interest rates go up or something happens to their business can they carry on trading, if so that’ll be great, if not you’ve got to look at the covenant.

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