24 April
2018
PICTON PROPERTY
INCOME LIMITED
(“Picton”, the
“Company” or the “Group”)
LEI:
213800RYE59K9CKR4497
Net Asset Value as
at 31 March 2018
Picton (LSE: PCTN), the property investment company, announces
its Net Asset Value for the quarter ended 31
March 2018.
Highlights during the quarter included:
Continued NAV growth
- Net Assets increased to £487.4 million (31 Dec 2017: £477.4 million).
- NAV/EPRA NAV per share rose 2.1% to 90.4
pence (31 Dec 2017:
88.6 pence).
- Total return for the quarter of 3.1% (31
Dec 2017: 4.1%).
- Net gearing reduced to 26.7% (31 Dec
2017: 27.4%).
Dividend declared and improved
cover
- Dividend of 0.875 pence per share
declared and to be paid on 31 May
2018 (31 Dec 2017:
0.875 pence per share).
- Annual dividend equivalent to 3.5
pence per share, delivering a dividend yield of 4.0%, based
on 20 April 2018 share price.
- Dividend cover for the quarter of 128% (31 Dec 2017: 126%).
Portfolio growth and improved
occupancy
- Like-for-like increase in property portfolio valuation for the
quarter of 1.4% (31 Dec 2017:
2.1%).
- Exchanged contracts to dispose of a non-core asset for £3.85
million, 5% ahead of the December valuation.
- Completed five lettings, nine lease renewals / regears and one
rent review, on average 4.5% ahead of the December ERV, with a
combined annual rent of £1.9 million.
- Occupancy increased to 96% (31 Dec
2017: 95%).
Nick Thompson, Chairman of Picton,
commented:
“Picton has had another good quarter and end to its financial
year. We remain well placed, delivering further growth in net
assets, strong dividend cover and having further reduced our
gearing.”
Michael Morris, Chief Executive of Picton
Capital, said:
“Our focus on leasing and tenant retention has been the main
driver behind the increase in portfolio valuation during the period
and our improvement in occupancy reflects this. We have also been
helped by the weighting of our portfolio towards the industrial and
office sectors, given the recent well publicised difficulties in
the retail sector.”
This announcement contains inside information.
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
Andy Le Page, 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 £684 million diversified
UK commercial portfolio, invested across 51 assets and with around
360 occupiers (as at 31 March 2018).
Through an occupier focused, opportunity led approach to asset
management, Picton aims to be one of the consistently best
performing diversified UK focused 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
31 March 2018, was £487.4 million,
reflecting 90.4 pence per share, an
increase of 2.1% over the quarter:
|
|
31
March 2018
£million |
31
Dec
2017
£million |
30
Sept
2017
£million |
Investment properties * |
|
674.5 |
665.3 |
652.1 |
Other
assets |
|
17.9 |
18.1 |
18.9 |
Cash |
|
31.5 |
31.7 |
30.1 |
Other
liabilities |
|
(22.5) |
(21.4) |
(20.7) |
Borrowings |
|
(214.0) |
(216.3) |
(216.6) |
Net
Assets |
|
487.4 |
477.4 |
463.8 |
Net
Asset Value per share |
|
90.4p |
88.6p |
85.9p |
* The investment property valuation is stated net of lease
incentives.
The NAV attributable to the ordinary shares is calculated under
IFRS and incorporates the independent market valuation as at
31 March 2018, including income for
the quarter, but does not include a provision for the dividend this
quarter, which will be paid in May
2018. The full year audited annual results are expected to
be announced early in June 2018.
The movement in Net Asset Value can be summarised as
follows:
|
Total |
Movement |
Per share |
|
£million |
% |
pence |
NAV at 31 December
2017 |
477.4 |
- |
88.6 |
Movement in property
values |
8.5 |
1.8 |
1.6 |
Net income after tax
for the period |
6.0 |
1.3 |
1.1 |
Dividends paid |
(4.7) |
(1.0) |
(0.9) |
Other |
0.2 |
- |
|
NAV at 31 March
2018 |
487.4 |
2.1 |
90.4 |
The next independent valuation of the property portfolio is
scheduled for June 2018 and the
unaudited NAV per share, as at 30 June
2018, will be announced in July 2018.
DIVIDEND DECLARATION
A separate announcement has been released today (24 April 2018) declaring a dividend of
0.875 pence per share in respect of
the period 1 January 2018 to
31 March 2018 (1 October 2017 to 31
December 2017: 0.875 pence).
Post-tax dividend cover over the quarter was 128% (31 Dec 2017: 126%).
DEBT
Total borrowings at 31 March 2018
were £214.0 million, with a weighted average interest rate of 4.1%
and a weighted average debt maturity profile of approximately 10.3
years. 95% of the drawn debt is fixed under long term facilities,
with the remainder at a flexible floating rate under the Company’s
Revolving Credit Facilities (RCFs). Net gearing, calculated as
total debt less cash, as a proportion of gross property value, was
26.7% (31 Dec 2017: 27.4%).
The Company has a further £41 million available from its undrawn
RCFs.
PORTFOLIO UPDATE
The portfolio valuation increased by 1.4% or £9.3 million, with
the industrial sector delivering the strongest growth followed by
the office sector. The retail and leisure sector valuation declined
over the quarter as detailed below. The performance over the
quarter can primarily be attributed to asset management and tenant
retention, ERV growth and further yield compression on certain
assets.
The sector weightings at 31 March
2018 and valuation movements over the quarter are shown
below:
Sector |
Portfolio weightings |
Like
for like valuation change |
Industrial |
41.2% |
2.6% |
South
East |
28.6% |
|
Rest of
UK |
12.6% |
|
Offices |
35.9% |
2.0% |
London
City and West End |
4.1% |
|
Inner and
Outer London |
8.5% |
|
South
East |
10.9% |
|
Rest of
UK |
12.4% |
|
Retail and Leisure |
22.9% |
-1.6% |
Retail
warehouse |
9.5% |
|
High
Street - Rest of UK |
6.1% |
|
High
Street - South East |
5.3% |
|
Leisure |
2.0% |
|
Total |
100% |
1.4% |
Occupancy has increased to 96%.
As at 31 March 2018, the portfolio
had a net initial yield of 5.5% (allowing for void holding costs)
or 5.6% (based on contracted net income) and a net reversionary
yield of 6.6%. The weighted average unexpired lease term, based on
headline rent, was 5.2 years.
The top ten assets, which represent 49% 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 |
Tower
Wharf, Bristol |
Office |
South
West |
Shipton
Way, Rushden, Northants |
Industrial |
East Midlands |
Pembroke
Court, Chatham |
Office |
South
East |
Colchester Business Park, Colchester |
Office |
South
East |
Metro
Building, Salford Quays, Manchester |
Office |
North
West |
Key highlights in the quarter included:
Industrial
Three units were let at Easter Court in Warrington and Abbey Business Park in
Belfast, securing £0.1 million per
annum, 2% ahead of ERV. Both estates are now fully let.
In York, we surrendered a lease for a premium of £0.3 million
and, in a back-to-back transaction, re-let the unit, extending the
income for a further eight years at a stepped rent to £0.55 million
per annum, 10% ahead of ERV.
At Datapoint, London E16, we
removed a December 2019 break option
securing the occupier for a further five years at a passing rent of
£0.27 million per annum, which is subject to review in 2019. The
estate remains fully let.
Office
We let two floors totalling 19,100 sq ft at Tower Wharf in
Bristol, generating rental income
of £0.54 million per annum, which was 2% ahead of ERV. 90% of the
building is now leased, leaving one final suite of 6,425 sq ft
available.
At Colchester Business Park, we renewed a lease and secured a
26% uplift on the annual passing rent to £0.53 million, 2% ahead of
ERV. The property is 98% let.
We have exchanged contracts to sell Merchants House in Chester
for £3.85 million. The sale price reflects a net initial yield of
6.4% and a 5% premium to the December valuation. The sale is due to
complete in June and a further top-up payment is due, as detailed
in the announcement made on 29 March
2018.
Retail and Leisure
The retail and leisure sector valuation decreased by 1.6% during
the quarter, generally reflecting prevailing adverse trading
conditions in the retail sector. The only direct consequence
of various retailer failures was at our Peterborough asset where New Look entered into
a Company Voluntary Arrangement (CVA). This has resulted in a drop
in income (£0.2 million to £0.1 million) until October, after which
the unit will come back to us. We have already instructed
leasing agents to re-market the unit.
MARKET BACKGROUND
According to the MSCI IPD Monthly Index, the All Property total
return was 2.3% for the quarter to March
2018, compared to 3.4% for the previous quarter.
Capital growth was 1.0% (December
2017: 2.0%) and rental growth was 0.4% for the quarter
(December 2017: 0.6%). A more
detailed breakdown is shown below:
IPD rental growth
|
|
Number of IPD segments |
|
Quarterly
growth |
Positive
growth |
Negative
growth |
Industrial |
0.9% |
7 |
- |
Office |
0.4% |
9 |
1 |
Retail |
0.0% |
10 |
10 |
All
Property |
0.4% |
26 |
11 |
IPD capital value growth
|
|
Number of IPD segments |
|
Quarterly
growth |
Positive
growth |
Negative
growth |
Industrial |
3.0% |
7 |
- |
Office |
0.7% |
9 |
1 |
Retail |
-0.2% |
7 |
13 |
All
Property |
1.0% |
23 |
14 |
*Source: MSCI IPD Monthly Digest, March
2018
ENDS