7 March 2018 – hedging strategy update
The company has announced that it has entered into further hedging facilities totalling £55.8m, which will mean that it mitigates future interest rate risk. It now executed swaps for approximately 70% of drawn debt facilities, equating to £70.3m. The reason for this is the recent increase in expectations that UK interest rates will rise in the short to medium term. Interest rates have therefore been fixed on the majority of debt facilities in order to protect against higher rates and limit exposure to movements in LIBOR. Although this means that the average cost of debt has increased from 2.9% to 3.4% it reduces risk. We do not believe that this news is particularly significant but continue to see the shares as being fundamentally undervalued. BUY.