Picton Property Income Limited Edison issues initiation on Picton Property Income
June 26 2017 - 6:50AM
RNS Non-Regulatory
TIDMPCTN
Picton Property Income Limited
26 June 2017
London, UK, 26 June 2017
Edison issues initiation on Picton Property Income (PCTN)
Picton Property Income is an internally managed property
company, which has assembled a GBP624m portfolio diversified by
sector, geography and also income concentration. Long-term
performance has been strong; its portfolio has outperformed the
MSCI quarterly benchmark in the last one, three, five and 10 years.
It has also often exceeded its targeted geared IRRs of 10-15%. Last
year's property return of 9.9% was more than double the benchmark.
Improving occupancy, rental increases and falling interest costs
from debt reduction in FY17 should underpin earnings growth in
FY18-19, thereby supporting the dividend yield of over 4%. Despite
this track record and yield, Picton trades at a discount to the
sector average P/NAV, even after the share price recovery we have
seen in the last year.
The shares have performed strongly since the post-Brexit
sell-off last year and now trade on a 2% premium to our FY18
forecast NAV. Despite Picton's record of outperforming the sector
over the past 10 years and its yield being in line with most of its
peers, it trades at a slight discount to the average P/NAV for the
sector. As Picton is an income-focused company we have valued it
using a dividend discount model, which produces a fair value range
of 79p to 103p.
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Julian Roberts, +44 (0)20 3077 5748
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