25 July
2017
PICTON PROPERTY INCOME
LIMITED
(“Picton” or the “Company” or the “Group”)
Net Asset
Value as at 30 June 2017
and Interim Dividend
Declaration
Picton (LSE: PCTN) announces its Net Asset Value for the quarter
ended 30 June 2017 and Interim
Dividend.
Highlights during the quarter included:
Improved financial position with
continued NAV growth
- Increase in Net Assets to £452.5 million (31 March 2017: £441.9 million).
- NAV/EPRA NAV per share rose 2.4% to 83.8
pence (31 March 2017:
81.8 pence).
- Total return for the quarter of 3.4% (31
March 2017: 2.8%).
- Net gearing of 27.0% (31 March
2017: 27.4%).
Increase in dividend cover
- Dividend of 0.85 pence per share
declared and to be paid on 31 August
2017 (31 March 2017:
0.85 pence per share).
- Annual dividend equivalent to 3.4
pence per share, delivering a dividend yield, based on
21 July 2017 share price, of
4.0%.
- Dividend cover for the quarter of 116% (31 March 2017: 106%).
Asset management activity and capital
value growth
- Like-for-like increase in property portfolio valuation for the
quarter of 1.8% (31 March 2017:
0.9%).
- Exchanged contracts to sell two non-income producing assets for
£9.86 million, representing an overall gain of 37% above the March
valuation, with completion post period end.
- Completed five lettings, on average 2% ahead of the
March 2017 ERV, adding £0.9 million
per annum to the rent roll.
- Completed four lease renewals / re-gears adding annual rent of
£0.3 million, on average 5% ahead of the March 2017 ERV.
- Occupancy at 94% (31 March 2017:
94%), increasing to 96% after post quarter end disposals.
Nick
Thompson, Chairman of Picton, commented:
“We have maintained good momentum during the quarter,
demonstrated by the 2.4% growth in our NAV per share and an
improvement in our dividend cover. With net gearing of 27% and £51
million of undrawn credit facilities, the Company is in a good
financial position and has the resources to pursue tactical
opportunities as they arise.”
Michael
Morris, Chief Executive of Picton Capital, said:
“Positive performance over the quarter was driven by asset
management and leasing activity. We also exchanged contracts to
sell two non-income producing assets at a significant premium to
the March independent valuation. The capital realised will be
recycled into attractive opportunities that are supported by strong
property fundamentals.”
This announcement contains inside information.
The next NAV update as at 30 September
2017 will be announced in October
2017.
For further information:
Tavistock
Jeremy Carey/James Verstringhe, 020 7920 3150,
james.verstringhe@tavistock.co.uk
Picton Capital Limited
Michael Morris, 020 7011 9980,
michael.morris@picton.co.uk
The Company Secretary
Northern Trust International Fund Administration Services
(Guernsey) Limited
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3QL
Sam Walden, 01481 745 001,
team_picton@ntrs.com
Note to Editors
Picton is a property investment company established in
2005. It owns and actively manages a £636 million
diversified UK commercial portfolio, invested across 53 assets and
with around 350 occupiers (as at 30 June
2017). Through an occupier-focused, opportunity-led approach
to real estate asset management, Picton aims to be one of the
consistently best performing diversified UK property companies
listed on the main market of the London Stock Exchange.
For more information please visit: www.picton.co.uk
NET ASSET VALUE
The unaudited Net Asset Value (‘NAV’) of Picton, as at
30 June 2017, was £452.5 million,
reflecting 83.8 pence per share, an
increase of 2.4% over the quarter:
|
30
June 2017
£million |
31
Mar 2017
£million |
31
Dec 2016
£million |
Investment properties
* |
626.5 |
615.2 |
615.6 |
Other assets |
17.9 |
18.6 |
17.6 |
Cash |
32.9 |
33.9 |
28.2 |
Other
liabilities |
(20.4) |
(21.2) |
(22.1) |
Borrowings |
(204.4) |
(204.6) |
(204.9) |
Net Assets |
452.5 |
441.9 |
434.4 |
Net Asset Value per
share |
83.8p |
81.8p |
80.4p |
* The investment property valuation is stated net of lease
incentives.
The NAV attributable to the ordinary shares is calculated under
IFRS and incorporates the external market valuation as at
30 June 2017, including income for
the quarter, but does not include a provision for the dividend this
quarter, which will be paid in August
2017.
The movement in Net Asset Value can be summarised as
follows:
|
Total |
Movement |
Per
share |
|
£million |
% |
pence |
NAV at 31 March
2017 |
441.9 |
|
81.8 |
Movement in property
values |
9.6 |
2.2 |
1.8 |
Net income after tax
for the period |
5.3 |
1.2 |
1.0 |
Dividends paid |
(4.6) |
(1.0) |
(0.8) |
Other |
0.3 |
- |
- |
NAV at 30 June
2017 |
452.5 |
2.4 |
83.8 |
The next independent valuation of the property portfolio is
scheduled for September 2017 and the
unaudited NAV per share, as at 30 September
2017, will be announced in October
2017.
DIVIDEND DECLARATION
A dividend of 0.85 pence per share
is declared in respect of the period 1 April
2017 to 30 June 2017
(1 January 2017 to 31 March 2017: 0.85
pence). The dividend will be paid on 31 August 2017 to shareholders on the register on
11 August 2017. The ex-dividend date
is 10 August 2017.
Post-tax dividend cover over the quarter was 116% (31 March 2017: 106%).
DEBT
Total borrowings at 30 June were £204.4 million, with a weighted
average interest rate of 4.2% (100% fixed) and a weighted average
debt maturity profile of approximately 11.5 years. Net gearing,
calculated as total debt less cash, as a proportion of gross
property value, was 27.0% (31 March
2017: 27.4%).
The revolving credit facility expiring in 2018 was extended by a
further three years until June 2021.
The facility is initially for £24 million and the annual
non-utilisation cost will be £0.18 million. Once drawn, the
facility will incur interest close to 2.2% per annum, which
reflects 190 basis points over three month LIBOR.
Across its two revolving credit facilities the Company now has
£51 million available and undrawn.
PORTFOLIO UPDATE
The portfolio valuation increased by 1.8% or £11.4 million. The
best performing sector in the portfolio was offices, which
primarily reflected asset disposals and leasing activity at
Farringdon, as detailed below.
The portfolio consisted of 53 assets with an average lot size of
£12.0 million. The sector weightings at 30
June 2017 and valuation movements over the quarter are shown
below:
Sector |
Portfolio
weightings |
Like
for like valuation change |
Industrial |
40.2% |
2.1% |
South East |
27.2% |
|
Rest of UK |
13.0% |
|
|
|
|
Offices |
34.6% |
2.9% |
London City and West
End |
4.3% |
|
Inner and Outer
London |
9.1% |
|
South East |
12.3% |
|
Rest of UK |
8.9% |
|
|
|
|
Retail and
Leisure |
25.2% |
0.0% |
Retail warehouse |
10.3% |
|
High Street - Rest of
UK |
7.2% |
|
High Street - South
East |
5.5% |
|
Leisure |
2.2% |
|
|
|
|
Total |
100% |
1.8% |
Occupancy has increased to 96% post quarter end, as a result of
the two vacant office disposals detailed below.
As at 30 June 2017, the portfolio
had a net initial yield of 5.7% (allowing for void holding costs)
or 5.8% (based on contracted net income) and a net reversionary
yield of 6.8%. The weighted average unexpired lease term based on
headline rent was 5.5 years.
The top ten assets, which represent 48% of the portfolio by
capital value, are detailed below.
Asset |
Sector |
Location |
Parkbury Industrial
Estate, Radlett |
Industrial |
South
East |
River Way Industrial
Estate, Harlow |
Industrial |
South
East |
Angel Gate Office
Village, City Road, EC1 |
Office |
London |
Stanford House, Long
Acre, WC2 |
Retail |
London |
50 Farringdon Road,
EC1 |
Office |
London |
Shipton Way, Rushden,
Northamptonshire |
Industrial |
East
Midlands |
Pembroke Court,
Chatham |
Office |
South
East |
Queens Road,
Sheffield |
Retail
Warehouse |
Yorkshire & Humberside |
Phase II Parc Tawe,
Swansea |
Retail
Warehouse |
Wales |
Metro, Manchester |
Office |
North
West |
Key highlights in the quarter included:
Office
The Company exchanged contracts to dispose of two vacant office
assets in Bracknell for a combined consideration of £9.86 million,
with completion occurring after the quarter end. The disposal of
Phoenix House, Waterside Park follows the disposal of the adjacent
Queensgate House announced earlier in the year. L’Avenir,
Bagshot Road became vacant in June
2017 and benefited from permitted development rights, which
could enable an office to residential conversion. The
combined sale prices reflect a 37% premium to the independent March
valuation and a 6% premium to the June
2017 valuation.
At the Company’s largest office vacancy, 50 Farringdon Road
London EC1, two suites of 3,000 sq ft and 8,900 sq ft respectively
have been let, generating a combined rent of £0.62 million per
annum. The lettings are 2% ahead of the March 2017 ERV, meaning that 75% of the building
is now leased.
A lease was renewed at Angel Gate in Islington securing a 28%
uplift from the passing rent to £58,000 per annum, in line with the
March 2017 ERV. Two suites are under
offer and two further suites are being refurbished ahead of
leasing.
At 180 West George Street, Glasgow, where we are undertaking a
comprehensive refurbishment, we renewed a lease with Standard Life
at £0.19 million per annum, 4% ahead of the March ERV.
Industrial
The Company’s largest industrial vacancy at River Way, Harlow
was let. This follows receipt of planning consent for a
change of use, thereby satisfying conditions contained within an
Agreement to Lease, signed earlier in the year. The 30,500 sq ft
letting secures a minimum 10 year term certain and will produce
rent of £0.2 million per annum, with uplifts collared and capped at
2% and 4% respectively, compounded annually.
Elsewhere, we settled two rent reviews, securing £0.14 million
per annum, which was a 16% increase on the passing rent and 5%
ahead of the March 2017 ERV.
Retail and Leisure
The 152 bedroom hotel in Luton
reopened during the quarter following a comprehensive refurbishment
undertaken by the incoming occupier, Thistle Hotels.
MARKET BACKGROUND
According to the MSCI IPD monthly index, the All Property total
return was 2.5% in the quarter to June
2017, compared to 2.3% in the previous quarter. Capital
growth was 1.1% (March 2017: 0.9%)
and rental growth was 0.4% (March
2017: 0.3%).
IPD quarterly growth*
IPD
Sectors |
Rental value |
Capital value |
Industrial |
1.0% |
3.2% |
Office |
0.3% |
0.7% |
Retail |
0.1% |
0.3% |
Number of IPD segments with positive
growth*
|
Rental value |
Capital value |
Industrial |
7 |
7 |
Office |
9 |
9 |
Retail |
7 |
15 |
Number of IPD segments with negative
growth*
|
Rental value |
Capital value |
Industrial |
- |
- |
Office |
1 |
1 |
Retail |
13 |
5 |
*Source: MSCI IPD monthly index, June
2017
ENDS