Acquisition, £20m Placing and Notice of GM

6 August 2014

 

Palace Capital plc

( "Palace Capital" or "Company")

 

Proposed £32 million acquisition of Property Investment Holdings Limited,

£20 million Placing and Notice of General Meeting

 

Palace Capital, the AIM listed commercial real estate company, announces that it has entered into a conditional agreement to acquire the entire issued share capital of Property Investment Holdings Limited ("PIH") a property investment company based in Weybridge which has a portfolio of 17 properties valued at approximately £32.02 million (the "Acquisition"). 

 

The consideration payable by Palace Capital for the shares of PIH is up to £3.65 million which will be satisfied by the issue of the Consideration Shares at 310p.  The Company will also procure the repayment of £27.744 million of the outstanding bank indebtedness owed by PIH to RBS and Lloyds (subject to adjustment to reflect the impact of certain interest rate fluctuations between now and the date of such repayment).  After assuming other liabilities of PIH the total amount payable by Palace Capital in connection with the acquisition of PIH is £32.0 million.

 

To part finance the Acquisition and to provide additional capital to exploit further opportunities, Palace Capital is undertaking a conditional placing of 6,451,612 Placing Shares at 310p to raise approximately £20.0 million, before expenses (the "Placing").  The Placing has been arranged by Arden and Allenby. The Issue Price of 310 pence per Placing Share represents an approximate 6.8 per cent. discount to the closing middle market price of 332.5 pence per Existing Ordinary Share on 5 August 2014, the last business day before the announcement of the Placing.

 

Key Points

 

                ·      Second major portfolio acquisition by Palace Capital, following the Sequel portfolio in October 2013

                ·      PIH portfolio comprises 17 commercial properties located predominately in the South East, valued by
            DTZ at £32.02 million

                ·      Gross annual income from PIH properties is £2.5 million

                ·      Net initial yield 7.35% (7.8% gross) allowing for vacant properties.

                ·      Potential to enhance the value of the PIH properties through active management to reduce irrecoverable
            outgoings and increase rental income

                ·      Placing raising gross proceeds of £20 million       

                ·      Market capitalisation on completion of the acquisition at the placing price will be £62.5 million at the issue
            price

                ·      New £16 million banking facility with NatWest

                ·      Directors subscribing for £760,000 in the Placing

 

The Acquisition and the Placing are conditional upon, inter alia, the passing of certain resolutions at a general meeting of the Company.  Palace has today posted a circular to shareholders (the "Circular") convening the general meeting to be held at the offices of Hamlins LLP, Roxburghe House, 273-287 Regent Street, London W1B 2AD at 10:00 a.m. on 26 August 2014.  Extracts from the Circular are provided below and a copy of the Circular is available for download from the Company's website, www.palacecapital.com.

 

Neil Sinclair, Managing Director of Palace Capital, commented:

 

" I am delighted to be able to announce this, our second major acquisition.  The portfolio of properties is in good locations, predominantly in the South East.  The Board is confident that there are many opportunities to unlock significant value from these properties that will benefit our shareholders.

 

" To help finance the acquisition, we have raised new equity from both our existing shareholders and new investors.  I am extremely pleased by the level of support we have received for this placing.

 

" Looking forward, there are significant opportunities to deliver further value from both this portfolio and the Sequel portfolio we acquired in October last year.  The market trends remain encouraging and we will be working hard to improve the returns from our entire property portfolio to further enhance shareholder value."

 

 

For further information contact:

 

Palace Capital Plc Stanley Davis, Non-executive Chairman Neil Sinclair, Managing Director	Tel. +44 (0)20 7722 7603
Allenby Capital Limited (Nominated Adviser and Joint Broker) Nick Naylor/James Reeve	Tel. +44 (0)20 3328 5656
Arden Partners plc (Joint Broker and Lead Bookrunner) Chris Hardie	Tel. +44 (0)20 7614 5917
Broker Profile (Financial PR) Simon Courtenay	Tel. +44 (0)20 7448 3244

 

 

PLACING STATISTICS

 

Number of Existing Ordinary Shares in issue	12,520,602
Number of Placing Shares to be issued pursuant to the Placing	6,451,612
Number of Consideration  Shares to be issued pursuant to the Acquisition	Up to 1,177,419
Total number of New Ordinary Shares to be issued	7,629,031*
Enlarged Share Capital on Admission	20,149,633*
Issue Price	310p
Percentage of Enlarged Share Capital represented by the Placing Shares	32.02%*
Gross proceeds of the Placing	£20.0 million
Net proceeds of the Placing	£18.3 million
Market capitalisation of the Company at the Issue Price on Admission	£62.5 million*

 

*Assumes the maximum number of Consideration Shares are issued

 

The Following information has been extracted, without material amendment, from the Circular providing details of the Acquisition and Placing.  The same definitions apply throughout this announcement as are applied in the Circular.

 

1      Introduction

 

Palace Capital has announced today that it has entered into a conditional agreement to acquire the entire issued share capital of PIH, a property investment company which has a portfolio of 17 properties valued at approximately £32.02 million.  Under the terms of the Acquisition Agreement, the consideration payable by Palace for the shares of PIH is up to £3.65 million which will be satisfied by the issue of the Consideration Shares at the Issue Price to the Sellers.  The Company will also procure the repayment of £15.0 million of the outstanding bank indebtedness owed by PIH to RBS and the repayment of £12.744 million of the outstanding bank indebtedness owed by PIH to Lloyds (both subject to adjustment to reflect accrued interest and the impact of certain interest rate fluctuations between now and the date of such repayments).  After assuming other liabilities of PIH the total amount payable by Palace Capital in connection with the acquisition of PIH is £32.0 million.

 

To part finance the Acquisition and to provide additional capital to exploit further opportunities, the Board has announced a conditional placing of 6,451,612 Placing Shares at the Issue Price to raise approximately £20.0 million (before expenses).  The Placing has been arranged by Arden and Allenby. The Issue Price of 310 pence per Placing Share represents an approximate 6.8 per cent. discount to the closing middle market price of 332.5 pence per Existing Ordinary Share on 5 August 2014, the last business day before the announcement of the Placing.

 

The Company has agreed the terms of a Facility Agreement with NatWest which it is expected that PIH will enter into on or around the date of completion of the Acquisition.  Pursuant to the Facility Agreement, NatWest propose to  loan PIH £16.0 million, secured on the PIH Properties. 

 

The Placing is conditional, inter alia, on PIH and NatWest entering into the Facility Agreement and the passing of the Resolutions by the Shareholders at the General Meeting, which has been convened on 26 August 2014, notice of which is set out at the end of the Circular.  If the Resolutions are passed (and the Facility Agreement is entered into), the Placing Shares and Consideration Shares will be allotted immediately after the General Meeting, conditional on Admission which is expected to occur at 8.00 a.m. on 27 August 2014.  Should Shareholder approval not be obtained at the General Meeting or the Facility Agreement is not entered into by PIH and NatWest, the Acquisition and the Placing will not proceed.  The Placing is not underwritten.

 

The purpose of this document is to explain the background to the Acquisition and the Placing, to set out the reasons why your Board believes that the Acquisition and Placing are each in the best interests of the Company and its Shareholders and to seek your approval to the Resolutions at the forthcoming General Meeting, which will be held at the offices of Hamlins LLP, Roxburghe House, 273-287 Regent Street, London W1B 2AD at 10.00 a.m. on 26 August 2014.

 

2      Information on PIH

 

PIH was established in 1957 to focus on the development of industrial and commercial real estate in the South East of England. PIH has followed a buy and build and rent strategy but in recent years has undertaken property disposals, because it has been necessary to do so.   

 

Since being founded PIH (which is unlisted) has acquired properties with a mixture of bank debt, investment from shareholders and cash generated by the business. To support PIH's bank borrowings, PIH entered into interest rate swap arrangements in relation to its loan facilities with RBS and Lloyds in order to fix PIH's interest rate liabilities.

 

PIH's portfolio of properties had a market value of approximately £59.0 million as at 31 March 2007 but this valuation was significantly impacted by the subsequent UK economic decline. The UK economic recession led to a fall of approximately 30 per cent. in the value of PIH's property portfolio and this decline was compounded by the RBS and Lloyds' interest rate swaps (which were tied into long term fixed interest rates) and PIH was unable to benefit from falling UK interest rates on its bank loans. The interest rate on the Lloyds interest rate swap increased to 4.95 per cent. in May 2013 and the interest rate on the RBS interest rate swap increased to 5.84 per cent. in November 2012.  These increases had a further detrimental effect on PIH's profitability.

 

Over the past three years PIH has undertaken a programme of property sales from its portfolio in order to fund the part repayment of its bank loans, cancel the related interest rate swaps and reduce its interest payments. In the year to 31 March 2013 PIH sold five properties at a book value of £7.6 million and in the year to 31 March 2014 it sold one property at a book value of £1.0 million. PIH has not made any acquisitions since August 2012 as all its available cash has been used to part repay bank loans and cancel the related interest rate swaps in order to reduce PIH's interest charge. 

 

PIH achieved a net profit of £1.8 million in the year ended 31 March 2013. However it incurred a £2.5 million loss in the year ended 31 March 2014, largely as a result of a £2.3 million interest rate swap cancellation fee incurred in cancelling £9.0 million notional value of interest rate swaps.  In addition rental income has reduced and property costs increased as a result of additional vacant properties in PIH's portfolio. Reduced profitability has resulted in cash constraints and accordingly, PIH's management had to manage its supplier payment terms and stop paying dividends in its most recent financial period. PIH's annual accounts for the year ended 31 March 2014 were qualified on a going concern basis.

 

At 11 July 2014, PIH held 17 properties split into 55 individual units.  The PIH Properties have been valued, on an open market and fair value basis, by DTZ at £32.02 million.  Further details of the values attributed to the PIH Properties by DTZ are set out in  the Circular. The current gross annual rental on the PIH Properties is circa £2.5 million. 

 

On completion of the Acquisition PIH's chief executive will resign.  PIH's part time finance director will remain with the business.

 

3      Background to and reasons for the Acquisition and Placing

 

On 21 October 2013 the Company completed the acquisition of the Sequel Portfolio from Quintain Estates & Development PLC and Buckingham Properties Limited which comprised 24 properties around the UK, for a consideration of £39.25 million. At the time of this acquisition the properties in the Sequel Portfolio had an aggregate market value of £44.2 million, with a net rent receivable of £5.2 million. The Board has undertaken a programme of active management and as at 31 March 2014 (the Company's year end) the Company had completed the sale of five properties, all at above book value.  These properties are Gelderd Point (Leeds), two buildings at Argent Court (Tolworth), Atlantic Wharf (Cardiff) and Meadowcourt (Sheffield). At 31 March 2014 the remaining Sequel Portfolio was independently valued at £55.99 million. The Company also owns Hockenhull Estates, a portfolio of nine freehold commercial properties, acquired in October 2011.  As at 31 March 2014 the Hockenhull portfolio was valued at £2.23 million.

 

Since the acquisition of the Sequel Portfolio, it has remained the Company's strategy to focus on the UK secondary property market outside London, both through its current investment portfolio and by continuing to pursue additional acquisition opportunities. The Directors continue to believe that the disparity between the yields on prime London property compared to regional and secondary property offers good opportunities for investors. The Directors believe that, together with evidence of improving economic data from the UK economy in general, this supports their view that this is an opportune time to buy such property.

 

The Directors have looked at a number of opportunities but in their view most of them did not provide a sufficient return that they could recommend to the Company's shareholders. Having identified PIH and assessed the PIH Properties, the Directors believe that there is an opportunity to enhance the value of the PIH Properties through active management to reduce irrecoverable outgoings and increase rental income. The Directors believe the PIH Properties fit neatly within the Company's investment criteria, are being purchased at a reasonable price and offer significant potential for the creation of shareholder value.

 

The Company is undertaking the Placing to finance the repayment of PIH's indebtedness to RBS and Lloyds, alongside the Facility. The Placing will also provide funding for the Company to pursue other acquisition opportunities. 

 

4      Current trading and prospects

 

Subsequent to its financial year ended 31 March 2014, the Company has announced the following developments with the Sequel Portfolio:

 

·      the exchange of an agreement for lease in respect of a renewal of two offices leases (totalling 38,356 sq. ft.) in Milton Keynes with Rockwell Automation Limited for a period of 12 years, with provision for upward rent review at the end of every fourth year at a combined rent of £398,196 per annum. Under this agreement the Company will invest circa £2.5 million in refurbishing these properties;

 

·      a new 5 year lease at Courtauld House in Coventry of a 75,000 sq. ft.  industrial unit to German Auto components group Brose Limited for an annual rent of £325,000; and

 

·      the renewal of a lease over 26,140 sq. ft. of offices in Bristol to Balfour Beatty Group Limited for a period of 5 years, at an initial rental of £81,500 per annum for the first year, £162,500 per annum for the second and third years (with a break clause pursuant to which, subject to notice and conditions, the tenant may terminate the lease on 18 June 2017).

 

The Board will continue to actively manage the Company's properties and believes there is further opportunity to increase Shareholder value.

 

5      Details of the Acquisition Agreement

 

The Company has conditionally agreed to acquire the entire issued share capital of PIH, on the terms of the Acquisition Agreement, for consideration of up to £3.65 million, to be satisfied by the issue of the Consideration Shares at the Issue Price to the Sellers. The Company will also procure the repayment of £27.744 million of the outstanding bank indebtedness owed by PIH, comprising £15.0 million to RBS and £12.744 million to Lloyds (both subject to adjustment to reflect accrued interest and the impact of certain interest rate fluctuations between now and the date of such repayments).  After assuming other liabilities of PIH the total amount payable by Palace capital for PIH is £32.0 million.  Included in the Acquisition and Placing costs are £150,000 of transaction costs Palace Capital has agreed to pay on behalf of PIH.

 

Pursuant to the Acquisition Agreement, the Sellers have agreed not to dispose of the Consideration Shares prior to 30 September 2015 or the publication of the Company's annual accounts for the year ending 31 March 2015, whichever is earlier.

 

The Consideration Shares will rank pari passu in all respects with the Existing Ordinary Shares and therefore will rank equally for all dividends or other distributions declared, made or paid (save that they shall not rank for any dividend or the distribution of the Company declared, made or paid by reference to a record date before the Acquisition completes).  Application will be made to the London Stock Exchange for the Consideration Shares to be admitted to trading on AIM.  It is expected that Admission will become effective at 8.00 a.m. on 27 August 2014.

 

Completion of the Acquisition is conditional, inter alia, upon the passing of the Resolutions and Admission.

 

Further detail on the Acquisition Agreement, including the calculation of the number of Consideration Shares to be issued to the Sellers, is set out in the Circular.

 

6      Details of the Facility

 

The Company has agreed the terms of the Facility Agreement with NatWest.  The Directors expect that PIH and NatWest will enter into the Facility Agreement upon completion of the Acquisition. In the event that the Facility Agreement is not entered into by PIH and NatWest then the Acquisition and Placing will not complete and Admission will not occur.  The Facility constitutes a term loan facility of £16.0 million.

 

The Facility terms agreed between the Company and NatWest include: i) the Facility being available to PIH for five years from the date of completion of the Acquisition; ii) interest being charged at a rate of 2.75 per cent. above the NatWest lending base rate; and   iii) the Facility will be secured by a first ranking legal charge over each of the PIH Properties and a debenture over the entire undertaking of PIH.

 

The Facility Agreement contains a number of covenants on the part of PIH, including the loan to value ratio not exceeding 55 per cent. and the payment of rent on the PIH properties into a PIH bank account at NatWest.

 

Further detail on the Facility Agreement is set out in the Circular.

 

7      Details of the Placing

 

The Company has conditionally raised £20.0 million (before expenses) through a placing of 6,451,612 Placing Shares at 310p per share with institutional and other investors.  The net proceeds of the Placing (being £18.3 million) will be applied by the Company to: a) part fund (together with the Facility) the repayment of PIH's bank indebtedness with Lloyds and RBS; and b) fund future property acquisitions.  The Directors believe that these additional funds will enable the Company to pursue acquisition opportunities which are complimentary to the Company's existing property portfolio.  The Placing has not been underwritten. 

 

The Company has entered into a Placing Agreement under which Arden and Allenby as joint brokers have agreed to use their reasonable endeavours to procure subscribers for the Placing Shares at the Issue Price.  Further terms of the Placing are set out in the Circular.  Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM.  It is expected that Admission will become effective and that dealings in the Placing Shares will commence at 8.00 a.m. on 27 August 2014.

 

The Placing is conditional, inter alia, upon:

 

(a)      the passing of the Resolutions;

 

(b)      the Acquisition Agreement and the Facility Agreement becoming unconditional in all respects save in respect of any interconditionality with the Placing Agreement;

 

(c)      the Placing Agreement becoming unconditional in all respects (other than Admission) and not having been terminated in accordance with its terms; and

 

(d)      Admission occurring by not later than 8:00 a.m. 27  August 2014 (or such later time and/or date as the Company, Arden and Allenby may agree, not being later than 8.00 a.m. on 12 September 2014).

 

Accordingly if any of such conditions are not satisfied or, if applicable, waived the Placing will not proceed.

 

The Placing Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares and therefore rank equally for all dividends or other distributions declared, made or paid after the date of issue of the Placing Shares.  No temporary documents of title will be issued.

 

Directors participation in the Placing

 

The Directors are subscribing for £760,000 in the Placing.  This subscription is split as follows:

 

	At the date of the Circular			On Admission
	Number of Ordinary Shares	% of issued share capital	Placing Shares acquired	Number of Ordinary Shares	% of issued share capital5
Stanley Davis1	1,403,997	11.29%	161,290	1,565,287	7.77%
Neil Sinclair2	154,413	1.24%	19,3543	173,767	0.86%
Anthony Dove	43,000	0.35%	32,258	75,258	0.37%
Richard Starr	50,000	0.40%	32,2584	82,258	0.41%

 

¹ Stanley Davis holds 303,997 ordinary shares in his own name. The trustees of the IRG PLC Directors Retirement and Death Benefit Scheme of which Stanley Davis is the sole beneficiary holds 375,000 ordinary shares. The trustees of the SDA Directors Retirement and Death Benefit scheme of which Rachel Rita Davis, the wife of Stanley Davis, is the sole beneficiary holds 725,000 ordinary shares.

 

² London Active Management, a company controlled by Neil Sinclair and Pamela Sinclair (his wife) holds 1,791 ordinary shares, Neil Sinclair holds 4,500 ordinary shares and Pamela Sinclair 900 ordinary shares in her own name. The Trustees of the Sinclair Goldsmith Executive Pension Scheme of which Neil Sinclair is the sole beneficiary holds 147,222 ordinary shares.

 

³ These 19,354 Placing Shares are being acquired by the Sinclair Goldsmith Executive Pension Scheme

 

⁴ 16,129 of these Placing Shares have been acquired by Sharon Starr, the wife of Richard Starr

 

⁵ Assuming the maximum number of Consideration Shares are issued

 

Reasons for not carrying out a pre-emptive issue

 

The Directors have considered the most appropriate method to conduct the fundraising, including consideration of carrying out a placing and open offer or a rights issue. The Directors concluded that the time and costs associated with a pre-emptive offer were not in the best interests of the Company. After careful consideration, they concluded that the benefit of minimising the costs of any fundraising by way of a non-pre-emptive cash placing would be in the best interests of Shareholders.

 

8      General Meeting

 

The General Meeting, to be held at the offices of Hamlins LLP, Roxburghe House, 273-287 Regent Street, London W1B 2AD at 10:00 a.m. on 26 August 2014, is being called to seek Shareholders' approval to grant new authorities to enable the Directors, inter alia, to allot the Consideration Shares and the Placing Shares.

 

TIMETABLE OF PRINCIPAL EVENTS

 

	2014
Announcement of the Placing and Acquisition	6 August
Posting of Circular along with Forms of Proxy	6 August
Latest time and date for receipt of Forms of Proxy	10:00 a.m. on 22 August
General Meeting	10:00 a.m. on 26 August
Admission effective and dealings in the New Ordinary Shares expected to commence on AIM	8.00 a.m. on 27 August
Date for crediting of New Ordinary Shares in uncertificated form to CREST stock accounts	27 August
Date of despatch of share certificates in respect of the New Ordinary Shares in certificated form	by 8 September

 

Notes:

 

1    The dates set out in the Timetable of Principal Events above and mentioned throughout the Circular may be adjusted by Palace Capital plc.

2    All references to time in the Circular are to time in London.

 PIH PROPERTIES

 

The following data has been extracted from the independent valuation report prepared by DTZ, which valued the properties as at 11 July 2014.

 

	DTZ Valuation
1.       Ovest House,58, West Street, Brighton ,East Sussex BN1 2RA	£1.35m
Retail and office building in the town centre comprising an approximate net area of 8,124 sq. ft.  Multi-let with one floor vacant currently producing a gross rental income of £104,482 per annum.
2.       Units 1-3, Clayton Industrial Estate, Burgess Hill, West Sussex, RH15 9NB	£4.7m
Three warehouse/office buildings of which one is vacant about 10 miles North of Brighton comprising an approximate net area of 45,454 sq. ft. They currently produce a gross rental income of £319,000 per annum.
3.       Units A & B Imberthorne Lane, East Grinstead, RH19 1QY	£7.55m
Two retail warehouse properties comprising an approximate net area of 26,505 sq. ft. They are currently let to Wickes & Pets at Home at a gross rental income of £467,363 per annum.
4.       Princeton House,1-5, Victoria Road, Farnborough GU14 7NT	£0.83m
Office building comprising a net area of 6,623 sq.ft. Currently used as a Job Centre and let to Trillium (Prime) Property Group at a gross rental income of £70,200 per annum.
5.       Russell House, Molesey Road, Walton-on-Thames, Surrey, KT12 3PJ	£1.34m
Multi-let office building comprising an approximate net area of 23,796 sq. ft. Currently Producing a gross rental income of £141,405 per annum.
6.       Saxon House, Henson Way,  Kettering, Northants, NN16 8PX	£1.18m
Two factory warehouse units comprising a net area of approximately 29,376 sq. ft. amongst a large number of industrial properties. Currently let and producing a gross rental income of £146,800 per annum.
7.       138 Molesey Avenue, West Molesey, KT8 2RY	£0.43m
An industrial building comprising a net area of approximately 5,352 sq. ft. It is currently let at a gross rental income of £38,000 per annum.
8.       Treston House & Fenestra House, 5B&C, Bone Lane, Newbury RG14 5SH	£0.95m
One industrial and one trade counter building in a good location with an approximate net area of 12,058 sq. ft.  The properties are currently let and produce a gross rental income of £85,370 per annum.
9.       Unit H2, Parkway Industrial Estate, 87, St Modwen Road, Plymouth, PL6 8LH	£1.7m
A trade counter building with an approximate net area of 31,290 sq. ft.  on an extensive industrial estate. It is currently let to SIG Trading at a gross rental income of £157,000 per annum.
10.     54 Albert Road North, Reigate, RH2 9EL	£0.32m
An industrial unit in this upper class town with an approximate net area of 11,558 sq. ft. It is currently let and producing a gross rental income of 35,000 per annum.
11.     61 Albert Road North, Reigate, RH2 9EL	£0.96m
Three industrial buildings with a net lettable area of 25,024 sq. ft. They are currently let and produce a gross rental income of £117,600 per annum.
12.     Unit 2, Brookside Avenue, Rustington, BN16 3LF	£0.36m
An industrial unit comprising a net area of approximately 9588 sq. ft. It is currently let and produces a gross rental income of £36,000 per annum.
13.     1-11, Winchester Street, Salisbury, SP1 1HB	£1.98m
A five unit retail property together with car parking situated close to Market Square. It comprises a net area of 11,292 sq. ft. and produces a gross rental income of £152,200 per annum.
14.     Unit 5 Harnham Business Park, Netherhampton Road, Salisbury, SP2 8PF	£2.48m
A retail warehouse property on the outskirts of Salisbury with a net lettable area of 28,864 sq ft. It is currently let at a gross rental income of £222,759 per annum exclusive to Booker Cash & Carry.
15.     Fraser House, 56 Kingston Road, Staines-upon-Thames, TW18 4NL	£1.07m
A refurbished office building adjoining Staines Station. It has a net area of 6,741 sq. ft. and is currently vacant.
16.     Bridge House, 41-45 High Street, Weybridge, KT13 8BB	£3.5m
A retail and office building in this prosperous town comprising 11,525 sq. ft. It is currently let and producing a gross rental income of £331,113 per annum.
17.     The Old House & Rathbone House, 4 Heath Road, Weybridge, KT13 8TB	£1.32m
Two properties that were probably originally used for residential purposes and comprising a  net lettable area of 4,528 sq. ft. The properties are partly occupied by PIH and the remainder let at a gross rental income of £71,000 per annum.
TOTAL:	£32,020,000