Royal Mail PLC Exchange of contracts for Mount Pleasant plots (3554P)
30 August 2017 - 6:15PM
UK Regulatory
TIDMRMG
RNS Number : 3554P
Royal Mail PLC
30 August 2017
30 August 2017
Royal Mail plc
Exchange of contracts for sale of Mount Pleasant development
plots
Royal Mail plc (RMG.L) announces that contracts have been
exchanged for the sale of 6.25 acres of its Mount Pleasant site
(the Phoenix Place and Calthorpe Street plots) to Taylor Wimpey UK
Ltd (part of the Taylor Wimpey plc group of companies) for a total
gross consideration of GBP193.5 million. The consideration is made
up of GBP190 million in cash and the fair value of parking
facilities provided for Royal Mail of GBP3.5 million. As previously
stated, significant further investment by Royal Mail is required
for works to separate the retained operational site from the
development plots. These works are expected to cost approximately
GBP100 million and are planned to be completed by 2021.
A deposit of GBP9.5 million has been paid to Royal Mail
following the exchange of contracts. The remaining cash proceeds of
GBP180.5 million will be paid as follows. There are contractually
agreed staged payments over the 2017-18 to 2020-21 financial years
which, in aggregate, are expected to cover Royal Mail's outgoings
on the separation and enabling works over this period. Lump sum
payments are then due in 2024 for the balance of the consideration.
All deferred payments are secured by a Taylor Wimpey plc guarantee
and by registered charges on the land subject to the transaction.
It is expected that any surplus proceeds will be applied in
accordance with the Group's capital management policy.
Completion on Phoenix Place is unconditional and is expected in
2017. Completion on Calthorpe Street is subject to completion of
the separation and enabling works and is expected in 2021. An
accounting profit for each plot will be recognised in the year of
completion based on an apportionment of the total consideration
less the respective book value of the plot (including associated
separation and enabling costs), to reflect the commercial substance
of the transaction. The Phoenix Place and Calthorpe Street plots
had a combined net book value(1) of GBP29 million at 26 March
2017.
In the event that the purchaser sells either the Phoenix Place
or Calthorpe Street plots to a third party, Royal Mail will be
entitled to 50 per cent of any uplift in value achieved over the
initial purchase price. All reasonable costs incurred would be
taken into account with the appropriate indexation in the case of
Calthorpe Street. This clause will no longer apply once the first
building on each plot has been constructed up to the first floor
level.
Royal Mail secured a detailed development planning consent in
March 2015 to create 681 residential units at Mount Pleasant,
including affordable housing, retail and office space, and public
areas. The consent covers the separation and enabling works,
involving a major civil engineering and construction programme to
enable the residential development and achieve complete separation
between Royal Mail's ongoing operations and the new residential
properties. A further 0.27 acres plot, the office element of the
planning consent, will be marketed at a later date.
Martin Gafsen, Group Director of Property and Facilities
Solutions, Royal Mail said: "The sale of our development sites at
Mount Pleasant to Taylor Wimpey is a great opportunity for us to
contribute to the regeneration of the area around our iconic Mail
Centre building. This will create more housing, including
affordable units, as well as community facilities and more public
space. It will also help us secure the long-term future of our key
central London operational site."
(1) Net book value represents the historic cost of an asset
adjusted, where appropriate, for depreciation and subsequent
investment; it can therefore differ widely from the market value of
the asset.
This announcement contains inside information
Ends
Enquiries:
Media Relations
Sally Hopkins
Tel: 020 7449 8252/07801 094345
Email: sally.hopkins@royalmail.com
Peter Tilley
Tel: 07841 803316/020 3338 1007
Email: peter.tilley@royalmail.com
Investor Relations
Catherine Nash
Tel: 07436 560910/020 7449 8183
Email: investorrelations@royalmail.com
Company Secretariat
Kulbinder Dosanjh
Tel: 020 7449 8133
Email: cosec@royalmail.com
About Royal Mail plc
Royal Mail plc is the parent company of Royal Mail Group
Limited, the leading provider of postal and delivery services in
the UK and the UK's designated universal postal service provider.
UK Parcels, International and Letters ("UKPIL") comprises the
company's UK and international parcels and letters delivery
businesses operating under the "Royal Mail" and "Parcelforce
Worldwide" brands. Through the Royal Mail Core Network, the company
delivers a one-price-goes-anywhere service on a range of parcels
and letters products. Royal Mail has the capability to deliver to
more than 29 million addresses in the UK, six days a week
(excluding UK public holidays). Parcelforce Worldwide operates a
separate UK network which collects and delivers express parcels.
Royal Mail also owns General Logistics Systems (GLS) which operates
one of the largest ground-based, deferred parcel delivery networks
in Europe.
This information is provided by RNS
The company news service from the London Stock Exchange
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