AIM-listed property lender Urban Exposure plans to cut its operating base to £9.5m next year in a bid to support the profitability of the business in the new financial year.
The funder was approached by major shareholder R20 Advisory, a business run by Robert Tchenguiz, last month with a restructuring proposal for the business to restore shareholder value and improve liquidity in its shares. Urban Exposures shares have traded at as much as a 40% discount to NAV this year. Tchenguiz’s R20 believed this was due to the high management costs across the business.
Urban Exposure said it was continuing to review R20’s proposals and a number of different proposals for the company but that it expected its operating costs for 2019 to be lower than previously anticipated due to reduced staff costs costs arising from both lower variable remuneration costs and hiring fewer people than previously budgeted.
In terms of lending, the firm said it has completed committed lending of £498m during the year ending 31 December and therefore has now committed in excess of £1bn of new lending since admission to AIM in May 2018.
A further £268m of loans are in the advanced stages of execution and are expected to close in Q1 2020, having been delayed from closing in Q4 2019, principally due to the impact of political and economic uncertainty, and the group said it had a “strong additional pipeline” of loans of £686m going into next year.
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