McKay Securities Plc
Share buy-back programme
McKay Securities Plc (“McKay” or “the Company”), the only UK REIT specialising entirely in the South East and London office, industrial and logistics markets, today announces the launch of a share buy-back programme (the “Programme”).
As set out in the Company's interim results for the six-month period to 30 September 2020, the successful disposal of 30 Lombard Street, EC3 contributed to the reduction of the Company's LTV to 30.3%. Since then, the Board has maintained a strong balance sheet position in response to the economic and market uncertainty resulting from the Covid-19 crisis, covered in more detail in a separate Trading Update also issued today.
However, with improving visibility of market conditions and business progress, the Company's current substantial discount to net asset value means that the Programme offers the potential to make market purchases at a price or prices that the Company believes will be value enhancing.
Taking these factors into account, the Board has set the total size of the Programme at up to £10.0 million, or approximately 5% of the Company's issued ordinary share capital. The Company has appointed Stifel Nicolaus Europe Limited (“Stifel”) to execute purchases of shares under the Programme under its instructions.
Purchases will be subject to remaining within certain pre-set parameters, including NAV discount limits. Alongside share buy-backs the company remains focused on generating income from the existing 15.2% portfolio reversion and identifying attractive acquisitions.
The parameters under which the Programme will operate will be in accordance with the Company's general authority to repurchase shares, granted by its shareholders at the Annual General Meeting held on 23 July 2020 and which authorises the Company to purchase a maximum of 9,426,399 shares. The Programme will commence today and is expected to continue until the Company's 2021 Annual General Meeting, currently expected to be held on 1 July 2021.
The Board will keep the Programme under review to make sure it continues as an efficient and effective means of generating value for shareholders. While the Company has launched the Programme, there is no certainty on the volume of shares that may be acquired under the Programme and the pace of acquisitions.
The Programme will also be effected in accordance with the Market Abuse Regulation 596/2014/EU (as in force in the UK and as amended by the Market Abuse (Amendment) (EU Exit) Regulations 2019) (the “Regulation”) and Chapter 12 of the UK Listing Rules. Given the level of liquidity in the Company's shares, the Company will retain the ability to exceed the average daily volume restrictions established by the Commission Delegated Regulation 2016/1052/EU (as in force in the UK and as amended by the FCA's Technical Standards (Market Abuse Regulation) (EU Exit) Instrument 2019) (the “Delegated Regulation”) and therefore the Programme may not fall within the safe harbour provisions of the Regulation.
In advance of moving into a closed period ahead of its 2021 full year results, the Company will enter into an irrevocable commitment with Stifel to continue the Programme through a non-discretionary mandate, under which Stifel will make purchases of shares within certain pre-set parameters independently of, and uninfluenced by, the Company for the duration of the closed period. Under the terms of the non-discretionary mandate, Stifel will retain the ability to exceed the average daily volume restrictions set out in the Delegated Regulation. Thereafter, the Programme will continue on the basis set out above.
The Company will make further announcements in due course following the purchase of any shares under the Programme. Shares bought back under the Programme will be cancelled.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.