Disposals, Debt And Cash Update

Palace Capital (LSE: PCA) announces an update on disposals, debt and cash covering the period since it announced its Interim Results on 14 November 2024. A more in-depth trading update will be provided to the market later in the month.

Disposals

• The Company has completed on the sale of two investment properties for £14.8 million which, after adjusting for rent top ups, is 9.6% above the March 2024 valuation. The sales comprise:

o HQ Office, York, a freehold, multi-let building for a gross price of £10.0 million to a retained client of STR Capital Partners, at a 9.0% NIY. The net sales price is in line with the March 2024 valuation.

o Units 5&6b, Broad Street Plaza, Halifax, on a long leasehold interest for £4.8 million to Calderdale and Huddersfield NHS Foundation Trust, at a 7.5% NIY and 38% ahead of the March 2024 valuation. Additionally, the sale includes the removal of a seven year annual uncapped service charge shortfall landlord liability, the value of which is estimated at £0.4 million.

• The Company has now also completed on the sale of Nicholson Gate, Fareham, for a net price of £3.1 million, as previously announced.
• Sales activity at Hudson Quarter, York, has been muted since November 2024 due to wider economic uncertainty but the final three bedroom penthouse apartment has now been sold for the asking price of £0.8 million, 2.2% ahead of the March 2024 valuation. Ten units remain for sale and we anticipate further sales in the coming months.

Debt and Cash Position

• In line with the terms of the loan agreement with Scottish Widows, the Company repaid the outstanding £8.0 million loan (£7.9 million net of the loan break gain) in March 2025, in advance of the completion of the sale of the NHS units at Halifax. The Company is now debt free and the portfolio is entirely unencumbered.
• The Company has been in a net cash position since April 2024 and currently has cash of £32.1 million, including £1.1 million relating to the quarterly dividend to be paid on 22 April 2025, as previously announced.

Commenting on today's update, Steven Owen, Executive Chairman said:

"Since the announcement of our interim results in November 2024, we have continued to progress our disposal strategy and are now in a stronger cash position having repaid the remaining loan, resulting in the portfolio being entirely unencumbered.

"At an operational level, Palace Capital continues to make good progress with its asset management activities and the management of its cost base. The Company will provide additional detail on these and the strategy for its remaining properties in a trading update expected to be announced later this month. Following discussions with shareholders, we expect to announce details of a further significant return of capital, likely through another tender offer, in due course."

Palace Capital plc

Steven Owen, Executive Chairman

Financial PR

FTI Consulting

Dido Laurimore / Giles Barrie