Wynnstay Properties (LSE:WSP) — Interim Results

0:02 Good afternoon, ladies and gentlemen, and welcome to the WYNNSTAY PROPERTIES PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the Q and A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and will publish our responses where it's appropriate to do so. Before we begin, I would like to submit the following poll. I would now like to hand you over to the executive management team from WYNNSTAY PROPERTIES PLC. Philip, good afternoon, sir. Thank you very much. I'm Philip Collins, Chairman of WYNNSTAY PROPERTIES. Together with Chris Betts, WYNNSTAY's Managing Director, we're here to present our interim results, which were published earlier this afternoon and are now available on our website and from our company page on the London Stock Exchange.

0:57 We gave our first presentation on the IMC platform following the publication of our annual report and our AGM in July 2025. That presentation provided an introduction to WYNNSTAY and reported on our annual results to the 03/25/2025. Our update today is not going to repeat what we said in July. Anyone viewing this presentation who has not already viewed the July presentation is encouraged to do so as well as to look at WYNNSTAY's website at www.wynsdaproperties.co.uk. I would just like to remind you that WYNNSTAY is a long established property investment and development business. We have been posted on AIM since the AIM market was established thirty years ago in 1995.

1:46 Our principal shareholders are private, that is retail investors, many have been shareholders for a long time. Indeed, some can trace their holdings back through several generations to the funding of the company in 1886. Others have become shareholders more recently, particularly through through the trading platforms for retail investors introduced over the last twenty years. We have an established quality commercial property portfolio held to deliver resilient income as and well positioned for medium to long term growth of both income and capital. Our distinctive approach to our business is summarized in our July 2025 presentation and in our annual report 2025.

2:32 I'm pleased to report that after a successful year at the end of March, the business has continued to perform well over the six month period ended 09/29/2025. The headline figures are shown in this slide. Rental and property income have increased by 2.8% to just over 1,400,000. It's worth noting that our income in the first half of the previous year included rents from our Caution and Midhurst properties, which we have since sold. The income from the current year includes rent from the property in Waterbeach, Cambridge, which we acquired in May 2025. Operating income has decreased slightly by 6.4% to just over £1,000,000,000. This slight reduction reflects the costs incurred in negotiation of the beneficial outcomes rent reviews and new leases as well as investments that we have made in refurbishing some assets, including improvements to energy performance, on which Chris will comment shortly.

3:33 As a result, earnings per share reduced slightly by 1.4% from from 21.9p to 21.6p per share. However, net asset value per share has increased by 2.7% from 11.42p a share to 11.73p per share. Finally, consistent with our progressive dividend policy, the board has decided to increase the interim dividend by 5% from 10 p per share last year to 10.5 p per share this year, with the dividend being paid on Monday, December. During the period, we drew down additional borrowing from our facilities with Handelsbanken to part finance the acquisitions in Waterbridge, Cambridge.

4:19 So our borrowing at the end of the period borrowings at the end of the period were 11,384,000 compared to 9,971,000 last year. At the end of the period, we held cash balances of just over £600,000 available for future use of the business. And in addition, we have available £3,600,000 undrawn under our revolving credit facility with Handelsbanken. Consistent with our approach in the past cycles, we commenced discussions with our bankers, Handelsbanken, earlier this year on refinancing our facilities. They have expressed clear willingness to continue their funding of the business after December 2026 when the existing facilities expire. In terms of the outlook, we remain confident in our outlook for the business despite the short to medium term domestic outlook remaining unclear and the uncertainties about growth, government spending, inflation and the forthcoming budget later this month.

5:20 The second half of the year has started well, as Chris will cover shortly, with significant activity in the portfolio and with excellent rent receipts and occupancy levels. I'll hand over to Chris to deal with that. Hello. As makes in Philip's comments, we added a further property to the portfolio in May. I gave an overview of this investment in Water Beach, Cambridge in in our our presentation presentation in in July. But to recap, the terrace five light and touchable units provide well secured income of £183,000 per annum. We anticipate that the well documented buoyant local economy in Cambridge will provide an impetus for material income growth over the medium term.

6:08 Looking at completed leases over the first nine months six months of the year, we have completed nine new leases. All have been at increased rents that importantly meet or exceed the assumptions inherent in the independent portfolio evaluation dated twenty fifth of March of this year. Six of these leases were renewals to existing tenants of the leases that expired in the first half. One was the new letting in Aylesford noted in our annual report for 2025 and two were new open market open market lettings in Hailsham and Lythook that were proactively instigated because we were aware that the previous tenant was in financial difficulty. Our income position has also been enhanced because all seven tenant break options affected in the first six months have lapsed with the tenants in each case deciding to remain in occupation.

7:04 Indeed, the two break options falling due in the second half of the year have already also lapsed. We had one lease renewal outstanding from last year, which was at Hailsham. Frustratingly, the tenant decided at the late stage in the process to vacate at the end of August. Whilst remarketing has commenced, the result is that there is one vacant use at the end of the half year, but representing just 0.4% of the portfolio, both by floor area and estimated market rental value. Negotiations continue to continue for the one outstanding lease renewal during the first six months, which is for a unit in Bambury.

7:52 Eight leases expire in the second half of the year, and we are in active discussions for renewal terms in all cases. In terms of rent collection, I'm pleased to say that there is only one instance of rent arrears for the half year period. This results from a small business tenant in Haileshoe that because of our open relationship, we knew it was in serious financial difficulty. And in agreement with them, we successfully relet the units to a new tenant. The outcome was that we were obliged to write off rents of £3,202, representing just 0.2% of the six monthly rents due from the portfolio. Our 2025 annual report noted that attendance of one of the units comprising the Ipswich property went into administration in February, but we were but that we were receiving rent from the administrator because the business had been sold.

8:50 I'm pleased to say that the new owner has taken an assignment of the lease, and all rent due in the current financial year has been received. The new tenant is a long established national trade counter business. Looking ahead to the second half of the year, 99% of the rent due to date for the third quarter commencing the 09/29/2025 has been received. The current and anticipated requirements for energy performance certificates for our properties is something that we continue to address. Over the past quarter, our advisers have reviewed the buildings at our Heathfield and Halishing properties to establish what work is needed to secure c ratings.

9:37 We are seeking quotations to carry out the relatively minor changes needed. These studies follow similar exercises for the Aylesford and Lycroft properties. At former, improvements are being implemented for four units in conjunction with new leases to raise the rating from a d or an e to c at an anticipated cost to win stay of approximately £20,000. And finally, at three of our locations, we have identified surplus land that could be used for the development of two new units. We are exploring these opportunities in LipBook, Aelsboot and Ipswitch in terms of both plan and commission and viability.

10:23 I'll now hand you back to Philip. Thank you very much, Chris. That's the end of the presentation. All the information in this presentation is publicly available in our annual and interim reports and from our website. And I'll now hand back to the IMC moderator. Perfect, Philip, Chris. That's great. And thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the right hand corner of your screen. But just while the team take a few moments to review those questions that have been submitted already, just like to remind you that a recording of this presentation, along with a copy of the slides and the published q and a, can be accessed via your investor dashboards. Guys, you can see there we have received a number of questions throughout your presentation this afternoon. And thank you to all of those on the call for taking the time to submit their questions.

11:14 But, Caroline, at this stage, if I may just hand over to you to chair the q and a with the team. And if I pick up from you at the end, that'd be great. Thank you. Thank you. First question that has been submitted last meeting is would a potential increase in business rates on certain commercial properties have an adverse effect on valuations? I'll pick that up in the first instance. I think the simple answer is in the short term, the answer is no. Business rates is is a is a is a is a is a not an optional cost for businesses. Unlike many of the other costs, businesses have seen a lot of increased costs on their businesses over recent years.

12:01 We view the demand and supply imbalance in the market that we're invested in as outweighing many of these factors. Therefore, certainly, there is no direct correlation between the potential increase in business rates and an impact on valuations. Thank you. So, we've you've touched on energy efficiency. There's been a question come in about our total expenditure, expected to upgrade UATs to c will be across the portfolio and what time frame that'd be deployed over. Is there anything more you could say about the program for EPC works and anticipated time frame for that?

12:51 Well, as indicated in in my review just now, we we're carrying out a a review of all the properties in the portfolio concentrating on those ones, which is on the present EPC ratings have have the most work to do. The first thing to say is that we're finding that new draft EPCs is is looked at by our advisers, expert advisers, is that quite a few are increased because of tenant changes that have been implemented such as new lighting or new heating systems. We have carried out we to answer your question, we won't have a full idea until that review is is is completed across the whole portfolio. But we do have an initial budget estimates of some £200,000 to bring all properties up to a b to c or b rating, which would be over the time scale that's given in the current outline given by government, which is up to twenty thirty.

13:55 But I would emphasize that that is something that is still not fully determined by government. We haven't been set with it. The industry has not been given full detail of of the exact precise timetable that the government wishes to impose. Thank you for that. The couple of questions coming on in about the potential developments mentioned that it propels from Ipswitch and what stages these projects are at. Could you give any further detail on where we're actually at at those? I'm struggling with early stages. Yes. So in all three cases, we have applied for planning permission for the scheme that we have identified as as being best value.

14:47 The values of the back of advice received from from agents and others on what the potential out turn in term in terms of rents achievable. When the planning permission for all of for the three situations is clearer, we will be carrying out further developments, appraisal work to assess viability and, indeed, importantly, cost. Thank you. There's also a number of questions. I'm sorry, summarizing. This is rather a large number come through. About the sustainability of our steady rental increases that have been achieved rent review and on new leases and the whether that's a sustainable increases over time.

15:38 In view and in view that it seems to be that our valuations have been shown quite conservative and whether you can comment at all whether you expect those sort of higher rents to continue to be achieved on the upcoming lease renewals and revenues over the year. To answer the first limit of that question, we do anticipate further rental income increases from the eight lease renewal or lease expiry events coming up in the second half. The market rents in all these cases is well established, and we believe that can be achieved through negotiation. The market is either as I've mentioned in my in my response to an earlier question, tenants are under increased cost pressures, which is going to impact on on on market demand to a degree.

16:39 But we see continued take up of of of units and renewal of leases at the at the market rents to prevail. So at this stage, we've got no reason to believe that there will be any difficulty in securing rental income increases. Thank you for that. So same the property, there's quite general questions coming on investment yields applicable to industrial portfolio. Have you got an of the range of new investment yields applicable to our portfolio? Are you able to comment on that? There is quite a range of of yields that that that that seems to be applied to our value portfolio evaluation by the by the valuers.

17:29 They are typically at equivalent, what we call equivalent yields of around six and a half percent. And in terms of the future direction of those, it's property yields depend on a variety of factors. It's fair to say that we probably don't anticipate significant movement either up or down in in the in the short term. Thank you for that. I think that we have probably reached near the end of our time as the and called now we're in for for the presentation. So I'm just handing back to Philip. Thank you very much, Caroline. In closing, on behalf of the Board, Chris and I would like to thank everyone for their interest in WYNNSTAY by watching this presentation.

18:19 We hope you will continue to follow WYNNSTAY's progress. We'll look at the July 2025 presentation and our website, and you will watch out for and view our future presentations on our IMC. Thank you very much. Perfect, guys. If I may just jump back in there. Thank you very much indeed for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected for the opportunity to provide your feedback in order the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of management team of WYNNSTAY PROPERTIES PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.