Q2 2020 NorthWest Healthcare Properties REIT Earnings Call
Good morning, ladies and gentlemen, and welcome to the North West shelf kept properties feel state investment Trust second quarter 2020 results conference call.
This time all lines I know, if and only mode.
The presentation, we will conduct a question and answer session.
But anytime during this call you need assistance. Please press star show for the operator.
This call is being recorded on August 24, 2020, I would now like turn the conference over to Tom on <unk>. Please go ahead.
Thank you operator, and good morning, everyone.
We shut your age on yesterday.
Trend Bernard.
President shale in China, there, it's true that Schwartz.
On a regular it's true operating officer.
The other we're pleased to share with you our results for the second quarter 20.
First.
During today's call we may make forward looking statements sign on the Canadian Securities.
Such forward looking statements reflect management's expectations regarding our business plans future results. They are necessarily based on assumptions are subject to uncertainties risks.
Could cause actual results to differ materially.
Direct all of the into the Restructures <unk>.
[music].
The defensive nature of the reach healthcare real estate portfolio, but as I said look like 3% occupied more than 80% of revenues kamada directly or indirectly public health care.
This resulted in the retail operating results portfolio valuations not being significantly impact.
Hi impacted by Carbonite.
During Q2 2020, 97.6% over its revenues.
Additionally, the ownership basis.
Correct.
What multiple arrangements.
Results for July 2020, or broadly consistent with these figures.
So its deferral rate range spend 379 tenants, representing approximately 4% annual girls.
We already have the arrangements, whether its Canadian and Australasia portfolio.
During the quarter three did not recognize any significant precisions right correct right.
Hi, Chuck standing ready to be totally collectible.
The impact to coordinate team continues to affect countries on either.
Some countries progressing through phase three openings well either struggle to control the waves.
Nonetheless signs of a return to normalcy are beginning to emerge.
That's why the restart of elective surgeries and most of their its global markets.
Significant backlog so desktop over the course of the pandemic onest, taking the global backlog of surgery is more than 28 basis.
In the UK alone waiting list, that's growing by more than 4 million people eat.
Australia approximately half a million people were added to it.
As a result, we believe that pent up demand exists goals for a strong recovery for the healthcare industry and by extension healthcare real estate.
They as it relates to our hospital operators, we believe they are well positioned to participate in increasing volumes to alleviate this backlog similar like many of our tenets using our medical office buildings are expected to see see increased volumes in the months ahead, given the nature of the essential services with relatively inelastic demand that many of them.
Right.
Before touching on transactional items I wanted to announce the appointment of Craig Mitchell currently three Chief Executive officer of Australasia to the role of President.
He will place Bernard Carty, who is retiring from Murray after 15 years of leadership. Most recently through its vital healthcare Trust subsidiary, where do you will continue as the northwest represent a lot of sport.
In addition to support accelerating growth in Europe. The read has hired Tim Blackwell as executive Vice President signs management.
Markel muscle in as VP and country had another ones.
Positions, which it within the rights management team.
Additionally, the right. There's also announcing the appointment of Stefano Kings Battle to its board of Trustees effective September Eightth.
Well as an expense executive who has served in a wide range of rules in the insurance asset management and real estate businesses like Snatching Corporation <unk>.
Amongst a real scenario that she was executive Vice President human resources for the company's global workforce additional expense that is valuable to northwest.
Time of ongoing international expansion.
This kings, though is and what else are 100, most influential women in Canada by the women's Executive network.
She holds about share commerce degree from Greens University and as are actually de designation from the Institute a corporate directors.
She will replace Dr., David Miller, who resigned concurrently from the board to focus on a number of Virgin public health initiatives related to cover that team pandemic after almost seven years and surface to northwest and its predecessor entities.
Northwest we welcome this kinks out to our board in which Dr. Naylor and Mr. crotty success in their new endeavors, noting there are many contributions to the girls and success of 33 over the past years.
During and post quarter end. The read also made notable progress on its long term strategic priorities.
Including.
The acquisition of a strategic UK hospital portfolio.
On August 21st 2023 completed a 452 million dollar acquisition of a portfolio for hospitals located in greater London.
The properties are 100% leased on long term inflation index basis, I spend health care, leading English <unk> hospital operator.
Well I didn't portfolio was acquired at a 6.2% going in capitalization rate and funded with 223 million dollar term loan.
125 million dollar expansion of the reach of all day.
Credit facility in addition to existing resources.
The addition of the London portfolio is strategically important it increases the scale there its UK portfolio to more than $620 million positions for further growth in partnership with the regions, leading health care operators.
It also diversifies or ex UK operate intermix and brings its focus into major UK health care markets.
Lastly, it provides three what's an attractive portfolio, which seeks future.
Okay joint venture, which is a priority for the business.
During the quarter, we also advanced our European joint venture and in conjunction with her position out 3.1 billion dollar 2 billion Euro European JV initiative read entered into a binding agreement subject to regulatory clearances with GE I see Singapore sovereign wealth fund.
<unk> Pan European healthcare real estate opportunities together.
We are pleased to be expanding our partnership with Jesse into Europe.
Venture will benefit from a high quality initial portfolio and Leverages northwest significant regional presents a goal to building the leaving Pan European healthcare real estate platform.
We also completed strategic asset sales.
Say notified.
Year to date, there is completed three of its four key initiatives generating more than $130 million on that proceeds well, adding $273 million see bearing capital during the quarter there either that's the remaining disposition transaction, namely the sale of 70% of its $470 million German and.
Triple net portfolio, which will be is to see the European JV seed portfolio has been expanded by $196 million to include an additional five assets in the Netherlands and is expected to close in Q3 2020 subject customary closing conditions.
And lastly de leveraging let's see acquisition of the London portfolio expected to temporarily increase series leverage their Eaton Vance kinda to de leveraging strategy and achieving investment grade credit metrics through its target proportionate, Robert 45% and that debt to EBITDA ratio the times over the next 12 months.
For the quarter our results were in line with our expectations, noting the about de leveraging including annualized quarterly funds from operations of 92 cents per unit on a normalized basis by your payout ratio at each I'm Trisha earnings accretion from recent investment and financing activity wise as expected, although foreign exchange movements article.
They didn't dollar appreciate approximately 3.7% over the last quarter relative to the reach average foreign currency exposure, which continues to impact earnings in fact over the last 12 months, we estimate the relative strength of the Canadian dollar.
Reduced annualized so approximately five cents pretty yet.
In the context of a lower for longer Canadian interest rate environment. We expect these trends may begin to ease and then on at 2020, providing a tailored to their its future earnings.
And I said value decreased by approximately 1.2% to $12 in 37 cents per unit, driven again, primarily by higher Canadian dollar relative to Slurries foreign currency exposure with property values largely stable.
In terms of liquidity, the read as well position what $84 million a cash available credit post the closing of the UK acquisition and pro forma the completion of the European seed portfolio itself, which is expected to close in the third quarter.
As expected to increase to more than $359.
Needs its current UK portfolio I trust future UK JV.
<unk> has also completed repayments or renewals in respect of all 2020 maturing debt obligations on favorable terms and is now taking proactive steps to refinance normal course 2021 maturing. So these.
Operationally our results, which are derived from expanded 183 property 6.6 billion dollar healthcare infrastructure portfolio tenant quickly, though leading operators primarily on long term inflation index leases were on plan.
Inherent strengths of the portfolio are reflected in the root skew to 2020 year over year source currency cash recurring SPR NOI growth of 2.9% largely driven by contractual rent indexation and underpinned by 97% occupancy rate a weighted average lease term up more than 14 years and all regards highly defense.
Hopefully.
Significantly I know following our eight hospitals properties in Brazil, seven of which our tenant that I industry, leading Richard or have continued to operate with adjustments for cold and related activity as a major cities in Brazil deal a challenging cobot environment.
I read it is also focused on getting traction with additional high quality operators in Brazil, and she is very constructive market in the dark.
Canadian there will be portfolio was impacted by told the 19 to varying degrees as some services such as non emergency dental and physiotherapy were temporarily suspended because of government and our industry mandated shutdowns or by physician distance and got lots.
The majority of tenants you continue to offer services and their parents says what provided government funded virtual care either from their preferences or remote.
Approximately 711% or the tenants answered rent deferrals, which particular typically it's where the equivalent of two months. So gross rent and have an average repayment period at eight mobs in exchange for the deferral approximately 50% of tenants agreed to lease extensions.
In aggregate Threeq brand cigarettes, <unk>, that's that totaled less than 1% of the regions girls right.
In the majority of these cases tenants agreed to extend their leases by an average of approximately 32 months in exchange for any update.
<unk> activity in Canada has ramp remained robust with 89% and 54% of the region's annual budgeted renewal new leasing activity respectively complacent.
I will act as activity resulted in a 91% effect of renewal rate for the quarter occupancy for the region was on plan at 92.3%.
In Europe or hospital tenants in large cannot clinic operators have performed well.
In Germany, the government provided financial incentives so the conversion of some facilities or a portion not so that facilities. So coated related demand that took effect at a number of our properties.
On that have lots of surgeries and the curtailing of certain rehabilitation services resulted in select club clinics in Germany in the Netherlands, experiencing where dish reduce patient demand, resulting in short term rent deferrals been graduates, but generally with short term repayment plans.
No such deferrals are granted to our UK hospital operators, who are most private hospitals, including loans had their capacity requisition and paid for by the National Health service or NHS. So they could provide that supply to help the NHS manage health care needs during the <unk>.
Arrangement has been extended until at least October 31st with the government recently announcing an additional 10 billion pound.
Yes men towards reimbursing private operators to provide care in the years ahead in order to relieve pressure on long waiting lists swell during the pembina.
In Australia, New Zealand to varying degrees governments also secured access to many private hospital beds again, providing underlying financial support to most of our operators while their revenues were curtailed, let's see postponement of certain care, especially a lot to searches.
I'm cases out support was insufficient. So we have entered into short term rent. So arrangements. However, even in these cases, a majority of right what's still collected.
Across three its global markets all of our properties have remained open and operational during a pandemic because the effects independents are uncertain. There can be no assurance there will not be any further disruptions to our tenets that future.
<unk> based on their resiliency today, we are confident that the portfolio as well position to continue to perform even in these challenging times.
I'm pleased with the progress made during the quarter, which advance the number there its key long term strategic objectives and also produced solid operating results. Despite the disruption and conflicting priorities caused by the code did not change.
With deep relationships best in class regional operating platforms and strong access to public in attractively private attractively priced private capital the right is well positioned to continue executing on that strategy.
We have almost $5 billion in capital available in our JV is to pursue new opportunities as they arise and expect to find both generational and opportunistic possibilities over the balance of 2020.
I'll now ask the operator to open up the call for questions.
Thank you.
Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by than what's on your Touchtone phone you well here with me, Tom probably technology you have a class.
If you are using a speaker phone please let the handset before passing any Keith.
One moment. Please state your first question.
Ladies and gentlemen, as a reminder, shouldn't have any questions. Please press star one now.
Your first question comes from Calwell National Bank. Please go ahead.
Hi, good morning, everybody.
Well that's all.
I just wanted to ask on the fee line. This quarter. So you know like from your disclosures you build a bear.
11 million first half any sort of continue to guide into that 35 million run rate suits she'd be expecting that fee income too.
Significantly increased in the back half here.
Hi, Todd it's a it's Paul here.
Yes, I think that's right you know that the major difference and.
In the yeah, a little bit the first but more the second quarter two prior years was.
Slightly less transactional activity and obviously with the completion of.
Our European JV and related to see portfolio as well as plans for a UK JB.
Likely expected through the balance of the air we do see meaningful I see take typically levels coming so I think.
A lot of that already booked unplanned as well as some pretty near term.
Items that we expect to add to the mix so.
Very much yes show and I don't know if you'd had anything to that in terms of so more precision.
Yeah, well I think that's there the other comments. They just that there is you wouldn't know that on a year to date basis.
For a portion of BBAM has actually increased by materially in really coming out.
Significant deployment of capital a lot around a 29.
20, as we look for it.
[laughter].
To search.
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Yes.
Okay and.
And then a page 30 of your Investor update presentation, you sort of outline how you come to.
30, Oh.
You provide a chart breaking down how you see that valuation of the manager changing.
For about 275 and Q2.
2019 to pro forma all of the future transactions all accounted about.
125 million can you just walked through high year arrives.
That's 725 million.
What sort of the valuation a purpose that you're you're going to get there.
Oh I be jumped into that.
Please.
Yeah. Thanks for calling it clearly you know the growth the at our global managers had a very significant owning a business over the last 12 18 months <unk>. If we look back about a year ago asks you to 29.
The business had a three.
Billion dollars of committed a women's in JV.
As JV initiatives and I was under life insurance.
Valuation I had not about $35 million have stabilized fees.
As we look through our Q2, 2020 valuation, which I'd highlight as $525 million, that's really a function of very substantial increase in a U.M. year over year from that $3 million <unk> to $8.4 billion committed facilities today in respect to both our Australian coal.
Our hospital JV, our investment and vital platform as well as a European JV is $3.1 billion.
The real wrote in the year over year <unk>.
<unk> has been driven by underlying increases in the lab and increased and stabilize fees from about $35 million to $60 million.
Look through the valuation metrics that we think about that underpin that 525, my dog valuation and the 8.4 billion or a when I get three looking at our stabilized fees applying <unk>.
In the market base EBITDA margin against those fees, which we'd have to be between 60, and 70% <unk> and then valuation multiple that we believe is conservative in the context of perpetual JV relationships I in the Rangers 13, 15 times on multiple site. So that gets you to the current valuation to 500.
25 million.
To further grow to $725 million that you called them I is really layering in I'd say the current initiatives that we've spoken to oh through around expanding our or existing.
Central New Australian JV relationships and then also.
Rowing leveraging our eyes are current portfolio that you pay into a broader UK health care.
So we do see path over the near term of growing our anyway.
<unk> million dollars to about $12 billion, and thereby increasing related fees and EBITDA.
Right.
There are $200 million.
Okay, Great that's helpful.
And then just on your collections to just to make sure I'm comparing needs rate too. So the other news I cover so.
Are you quoted a 90.
Seven Percentish collection rate that was taking deferrals into account so.
If I think of like a as a percent.
Builds rents it looks like it might be around 93, it's about square with you'll know.
[noise] [noise] shale under Peter did you asked me to.
Yes, Oh I can take I did a a high level, yes. It does I in terms of our overall quarter or cash collections. If you want to think about it that way a week yet I mean, just over 90% I met with about three or 4% attributable to just for all arrangements on a consolidated basis.
Hi, which as we know in for all his introductory remarks, I relate primarily to the Canadian and Australian Asian portfolios, where we've engaged.
379 tenants or so on representing 4% of gross rent.
Informal floral arrangements.
Okay.
And then I guess.
You know you've talked about wanting to take advantage of.
You know.
Generational our opportunistic deals that could you know materialize through this period.
Safe to say that you know we should be expecting the majority of your acquisitions going forward. So really come via the joint venture or should be spread through the joint ventures in that you're you know you're probably not going to be taking 100% about <unk> balance sheet that much going through this period about the.
Our goal here.
Correct, Yeah, so very much so the plan.
And it has there been any thought she likes.
Canada, that's sort of the only place where you're not running you know TV like that there's been a cox alike.
You know maybe employing the same strategy requires a you know you've been quite around the world or with the Canadian Uh Huh.
Yeah, So along a lot of thought I think a as as you will have noted I think we have prioritized Europe I think very much coming into the year and so certainly now the Europe and UK. You know is a is our near term focus.
But I think as we look down the line you know we see this model being suitable and in all geographies. So certainly you know as we as we start to think about.
The Americas purchase it still on the geography now without.
Hey, JV arrangements, you know be no very much a key focus for us.
21.
Okay. That's great. Thanks, very much so.
You're welcome.
Thank you. The next question comes from Chris Capri from JBC. Please go ahead.
Hi, Good morning, just following up on on towers question regarding the had a generational opportunities I'm, assuming you're talking about Europe is that right and then just in terms of you know if we try to think about how competitive that process might be.
Okay.
HM given the success you and others that had in this kind of area are there any more people looking at a at this space.
So a couple of things I I think.
You know, we see opportunities and then really generational ones coming around the world I would just say that you know our our focus to to the earlier comments will be to leverage our existing jvs, which are or books in.
Australia New Zealand.
No broadly across Europe. So I think we see no good opportunities in all of those markets and certainly generational ones you know with our existing.
Operating tenets and partners.
Starting.
In each of those markets. So just called that out for a level of.
Precision I think you know we.
Hold on ceilings, Chris said, we've mentioned earlier I continue to see health care as coming.
Relatively.
Well position through this through this difficult moment. So no. Our view is that yes, we love more broadly into.
No.
And to a real estate asset classes that there are a number of them that house significant challenges and certainly in the mid to longer term implications and try to them and so when we talk to our investment partners.
Thinking about new health care.
Real estate opportunities you know, it's screens really well and we've seen that Jesse most recently, but there are number of active discussions that we're having.
Our partners that.
You know that build on those themes. So I would think that you know Thats Representatives. You know, yes. There are no meaningful you know institutional partners and other types of.
Capital a investors starting tomorrow seriously consider the asset class I think that's not necessarily an entirely new seemed but one that is accelerating.
But I think where many of those you know investors or even in some cases competitors like our scale or or the operating platforms that we have to be able to or relationships that we have to be able to deploy capital and in many ways that we do it. So you know well I think.
Theres going to be more capital formation into healthcare real estate I think we're still pretty well position to be able to offer you know the services and scale and their relationships to be able to execute <unk> well in each of our market. So you know that would be a quick answer to it but for sure.
Are you know we are seeing it seems that health care that state you know screening monetary positively across the market and the good news as there were a big markets, where there's lots to do and we don't have to do everything to house.
Meaningful.
Meaningful opportunities I I call out for example, Australia, where are you know in our core JV you noted in Boston to announce billion dollars over the last 18 months.
Partner, there and we see very similar trajectory looking forward.
Sample and we've got committed capital to do that so you know those would be yeah. Those would be the general scenes and then now with Europe coming on and certainly with a pan European a mandate in front of US you know we see.
Many many opportunities in each of our core markets and and well start to look at a number of adjacent markets as well.
The UK as an example, we just added to that MXN 2020 and already.
The sizable portfolio there and.
Instead of relationships that I'd say cost for the ability to build on so those are those are seems that we're focused on as they look down the line but.
The big trend for sure is that I think you know as an alternative asset class, maybe perhaps becoming mainstream we're starting to see.
How scared screen pretty positive costs investment universe out there and so lots of people taking about it.
Okay. Thanks for the color.
And then just two quick ones number one the upsizing of de a European seed portfolio can you just maybe talk to kind of.
How that timing that came about and then just second just from a maintenance perspective, the sequential change and the Canadian and why is that basically all parking revenue.
Okay. So to two quick seems to to the European a JV. So very much building all my earlier comments, you know a mandate broadened over the course of our discussions.
And as we work through that the market related market specific.
You know.
Education, and Onboarding process no way we.
To add our our Netherlands portfolio to the next which is quite complementary to the original German portfolio that we had identified so I'm not happened quite naturally.
Well they just don't on on those bigger seems that I said that Oh that you know that investors are looking for.
A bigger and broader strategy certainly still ones, we're talking to side at lined up nicely with what we're hoping to achieve so I think that that's a that's such a child how that she portfolio grew a timing is I mean, we are in closing right now so I think in reality.
It's really just customary conditions and we expect it to close broadly.
Q3.
Exotic about that so that's a pretty much locked in at this point.
You're moving back to Canada, yes, the vast majority of UBS Oh, the she too you know sort of revenue mess. If you all what was around that variable income stream, particularly parking.
A small number outside of our time et cetera.
No service oriented like cafes, and other things so no I think not not a surprise when you know set period of time, though I wasn't as much activity happening our buildings.
That level of activity is already started to pick up significantly as things have started to reopen and so we're seeing very quick return to <unk> to a traditional levels and certainly didn't know permanent dislocations and in our Canadian portfolio.
Or or others and other Germany, Australia.
Properties, you know there, they're fully back up and running at historical levels of activity. So yeah.
Pretty quick.
Sharp recovery.
Thanks was kinda back.
Thank you for next question comes from Saddam spend from BMO. Please go ahead.
Good morning ball shelling and on it I mean, that's what congratulations guys. This is a tough Gordon you based on the steep accomplishing our things on a shortage issue. So congrats on that.
My first question was primarily on the London <unk> for you.
Dozens puts you haven't either.
What you need them certain.
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Yeah, I think [laughter] hobby.
Continents in London and expansion in London. It is always tricky. So I'm certainly you know there are a number of a planned capital expansions or that you know that that world where else I think we're just starting to get our you know or.
Our Q up around.
Around the operator, and their plans and priorities going forward, but certainly you know we could see and then we've historically guided that sort of 5% to 10% of our portfolios typically are in some form of downscaled expansion and I would expect that those metrics again.
Object to.
London planning and she will Ah would be quite consistent you know and and as we are starting to see.
The emergence from from some of the pandemic.
Restrictions and and in particular, how the NHS is encouraging.
Public capacity and and all the existing private capacity a public demand I should say the backlog to be channeled through a number of our operators, who we think about flat to that theme. So [laughter] starting off so you know certainly that 5% to 10%.
Station, which is consistent across our portfolio is probably a good starting point, but we'll be working to refine that and if anything that might end up on the on the bigger side. Given you know given that NHS moment and some of the backlogs and you know the plans to work through the private system.
As we see it so those would be a couple of seem sir.
That's a caught up on double digit increase a minimum if you have a gap, but he'd like you guys. Just goes it's about 6.2 person and send them to other ports, we I guess they had about 6.5%.
And then he mentioned the presentation that the market does it on site to send so when you do end up times in this portfolio to the G.. We would then be marketed fleet of a D 32 quiet.
Yeah, but very much at markets and yeah, we at least to see some some nice value creation opportunities into the portfolio I think it's one of the reasons you know that we took the chance to invest at this moment in the specific.
Portfolio and those are are certainly near term focuses for us as we see no again all of these seems play out and then certainly no high interest and.
Yeah in particular in London.
You know London.
Hospitals.
Yeah, the demand and an opportunity trends there.
That's awesome, Oh, I'm, sorry, he oh, you're doing back to Gordon 19, and the impact it's hard on that won't be side or do you think it's going to somebody how many gleeson, Tom just keeping expenses on the bandwidth engine expenses should be providing forward into future.
Yeah, we do of course, and and I think we've been able to manage you know sort of between you know slightly lower activity levels at least in the quarter and perhaps coming through.
You know the operating expense line today with that with a plan that those will increase as we look through you know the balance of the year and into next year in order to accommodate for.
We're trying to close I'd call out, though that you know the vast majority of our leases in the 99.9% of our revenue is on that basis, and so you know even with slightly rising costs. Most of them, we'll be posture to tenants as part of that so obviously delivering leasing sufficiently answer value.
The area of focus for northwest as as we think about that in.
Yeah, we have a strong history I think in being able to develop deliver you know relative value through our you know operating business, which as you know as it was a very significant part of the northwest platform. You know with Ah you know with in house properties and leasing and asset management amongst other things. So yes, we're quite.
Focused on not in and making sure that are that our tenants are able to operate you know at the highest.
Levels of throughput safely I got so as we exit sort of.
Yeah, but cobot moment.
[noise] fair enough.
Thanks, Paul I'll turn it back.
Thank you.
Thank you for next question is a follow up from Calverley at National Bank. Please go ahead.
Hi, I just had a couple quick questions about credit markets, you Oh, I don't know sand one perhaps you can speak to that because you know.
Any big changes in your various markets in terms of like credit availability.
From before but pandemic the after.
I tell yeah, I do you just a general comment to that which should be no.
Highlight that Oh, we were able to refinance.
All of our 2020 debt maturities.
And I haven't seen our initial budgets freehold environment I you know, while we did you know it at the early onset of the.
And that makes the credit spreads widened out a little bit I you know we found the availability to be.
Like we did an amazing.
Spreads specifically post quarter end, we've seen a.
To kind of where they were pretty ethnic and then obviously in the.
Broader backdrop, the macro environment.
Overall, reducing base rates it nicely every region globally, I mean, if anything it seamlessly tightening.
Borrowing costs.
Okay and I think it was late last year, you know you're sort of heart starting to talk about targeting the ability to issue unsecured debentures.
You know can you talk at all about sort of where you stand on that process and what are the numbers. You can think you need to hit on that balance sheet side for the rating you'd want to got.
Yeah, I think though and I'd highlight that you weren't strategy very much remains intact around I, you know T.I. achieving investment grade metrics I, we view entry level into triple B low ratings around that I saw the 50% loan to value.
Perhaps more importantly, given the given the importance of management fee streams in our business.
I've noticed that eight times proportionate net debt EBITDA.
Highlights it as we progressed throughout the year on our various initiatives, including the completion of.
The sale on the European seed portfolio as well as the launch of the U. K G E.
Reading about portfolio, we very much siometrics tracking to those two targets.
In terms of where the discussions I'm sitting today.
We're very much of the early stages of those discussions looking for our numbers the track that more tightly to those specific.
Target and then and then Smith.
[music].
Okay, that's great thanks very much.
Thank you no further questions you May proceed.
Right. Thank you operator, I think that's all from northwest for this <unk> Q2, 2020, a conference calls so I wish everyone and good day. Thank you very much.
Ladies and gentlemen, this concludes the conference call for today, we thank you participating and we ask that you. Please disconnect your lines in Chinese domestic today.
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