Development & Trading Update
U+I (LSE:UAI), the specialist regeneration developer and investor, today announces an update to its anticipated development and trading gains for FY2020.
Brexit, the related slowdown in decision-making and the only recently resolved political uncertainty in the UK have continued to impact upon timing of some of our projects. In particular this has led to delays in securing planning consents following the election purdah and a further slowdown in transaction timetables.
This has recently been dramatically exacerbated by the impact of Covid-19 on the decision-making process, business sentiment and economic activity. The rapidly accelerating impact of the Covid-19 crisis on transactional activity and Central and Local Government policy means that there is currently no reliable way to predict, with certainty, the timing or value of transactions.
However, it is now unlikely that sufficient of the projects set out in our guidance at our interim results on 20 November 2019 will contract by 31 March 2020 to enable us to meet the lower end – £35 million – of our gains target for the year.
In the normal course of events, we would expect some of the deferred projects to be realised in FY2021 and will provide further detail of these in our full year results.
Based on the projects on which we have certainty, the aggregate amount of our development and trading gains number is currently materially below that £35 million target for the full year. That said, we remain in advanced legal negotiations on several projects within our flexible and substantial development portfolio, including Harwell.
If successfully concluded, these could have a material impact on our reported end of year total gains, albeit we expect that amount would still be below the £35 million lower end target. Given the confidential nature of these discussions, the Company is not yet in a position to provide a more detailed review of target gains as it believes this could prejudice its commercial position.
U+I has been actively managing its cost base and in the current climate it will be proactively reducing its operating expenses and all non-essential capital expenditure, with regular discussions to review these key areas and help mitigate risk. It also has the ability to access credit facilities should they be required to manage its liquidity needs, utilising its currently uncharged assets as security.
In addition to RNS releases once transactions close, a post close statement will be issued in early April updating the market on gains, trading and its cost mitiga