Dawnay Day Treveria today revealed a new management structure as it seeks to boost its dire share price performance.
The AIM-listed company, which was set up and managed by a subsidiary of collapsed property and financial services firm Dawnay Day and has a portfolio valued at €2.2bn (£1.9bn), said today that it would internalise its management and change its name to Treveria.
This is part of a wider trend for AIM-listed companies to internalise their management contracts, which is seen as better for shareholders because management interests are aligned with share price and general performance, rather than management simply being paid a fee based on the gross assets of the company.
The move comes after a strategic review in which it put itself up for sale and explored options to raise new equity, neither of which proved fruitful.
The company’s share price has dropped by 94% to just €0.05 in the past year, partly as a result of a fire sale in shares of the company by Dawnay Day founders Peter Klimt and Guy Naggar, but also due to uncertainty over the company’s management and worries about its high gearing.
The management of the company, previously undertaken by external Dawnay Day subsidiary Dawnay Day Treveria Real Estate Asset Management (DDTREAM), is now to be undertaken by Treveria Asset Management, an internal subsidiary of Treveria.
A €1m fee was paid to sever DDTREAM’s management contract.
Cushman & Wakefield has been appointed asset manager, taking over from Dawnay Day Property Investment (DDPI) on a three-year contract. A €1m severance fee was also paid to this company.
C&W will be paid an annual fee of 3% of net income. This fee has been guaranteed at €5m for the first year, falling to €4.5m and the €4m, in order to provide security to C&W and allow them to recruit the currently redundant DDPI team.
“The new arrangements set out in today’s announcement are structured to provide the best opportunity to rebuild shareholder value over the medium term,” Treveria chairman Ian Henderson said. “Management links with the Dawnay Day group are now severed and continuity in the key personnel has been ensured.
“Since the board announced a strategic review in June we have considered a number of options and opportunities presented to us. The conclusion we have reached is that the most appropriate course of action is to focus on the management of our existing portfolio by internalising the asset management team and managing our balance sheet prudently, while ensuring we utilise our cash resources carefully.”
