25 April
2017
PICTON PROPERTY INCOME
LIMITED
(“Picton” or the “Company” or the “Group”)
Net Asset
Value as at 31 March 2017
and Interim Dividend
Picton (LSE: PCTN) announces its Net Asset Value for the quarter
ended 31 March 2017 and Interim
Dividend.
Highlights during the quarter included:
Financial
- Increase in Net Assets to £441.9 million (31 December 2016: £434.4 million).
- NAV/EPRA NAV per share rose 1.7% to 81.8
pence (31 December 2016:
80.4 pence).
- Total return for the quarter of 2.8% (31
December 2016: 3.5%).
- Reduction in net gearing to 27.4% (31
December 2016: 28.3%).
Dividend
- Dividend of 0.85 pence per share
declared and to be paid on 31 May
2017 (31 December 2016:
0.85 pence per share).
- Annual dividend equivalent to 3.4
pence per share, delivering a yield, based on 21 April 2017 share price, of 4.0%.
- Dividend cover for the quarter of 106%, reflecting the
increased dividend paid February 2017
(31 December 2016: 112%).
Portfolio Activity
- Like-for-like increase in property portfolio valuation of 0.9%
(31 December 2016: 1.9%).
- Completed six lettings, on average 6% ahead of December 2016 ERV, adding £0.4 million per annum
to the rent roll.
- Completed the sales of three non-core assets for £6.5 million,
overall 10% ahead of the December
2016 valuation.
- Resultant portfolio of 53 assets with average lot size of £11.8
million (31 December 2016: £11.4
million).
- Occupancy maintained at 94% (31 December
2016: 94%).
- Post quarter end, completed letting of largest industrial void
for £0.2 million per annum improving the proforma occupancy to
95%.
Commenting, Nick Thompson, Chairman of Picton, said:
“We have had a good start to 2017, which is shown by a further
increase in NAV. During the quarter, we maintained a covered
dividend and reduced net gearing to 27%. We also continued to
reshape the portfolio selling three non-core assets and increasing
our average lot size.”
Michael
Morris, Chief Executive of Picton Capital, added:
“We continue to create positive momentum, making NAV accretive
disposals and letting space above independent valuation
assessments. We now have more than 40% of the portfolio allocated
to the industrial, warehouse and logistics sector, where we are
experiencing strong performance and which has proven to be
resilient to the broader economic and political volatility. We are
carefully reviewing opportunities in the market but will only look
to progress these where the property and financial fundamentals are
compelling.”
The Company intends to release its year end results during the
week commencing 5 June and a further announcement will be made in
due course.
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
Sam Walden, 01481 745 001,
team_picton@ntrs.com
Note to Editors
Picton is an income focused, property investment company listed
on the London Stock Exchange.
With Net Assets of £441.9 million at 31
March 2017, the Company's objective is to provide
shareholders with an attractive level of income, together with the
potential for capital growth by investing in the principal
commercial property sectors. Picton can invest both directly and
indirectly in commercial property across the United Kingdom.
www.picton.co.uk
NET ASSET VALUE
The unaudited Net Asset Value (‘NAV’) of Picton, as at
31 March 2017, was £441.9 million,
reflecting 81.8 pence per share, an
increase of 1.7% over the quarter.
The NAV attributable to the ordinary shares is calculated under
International Financial Reporting Standards and incorporates the
external market valuation as at 31 March
2017, including income for the quarter, but does not include
a provision for the dividend this quarter, which will be paid in
May 2017.
The next independent valuation of the property portfolio is
scheduled for June 2017 and the
unaudited NAV per share, as at 30 June
2017, will be announced in July
2017.
A detailed breakdown of the NAV is included in the Appendix.
DIVIDEND
A dividend of 0.85 pence per share
is declared in respect of the period 1
January 2017 to 31 March 2017
(1 October 2016 to 31 December 2016: 0.85
pence). The dividend will be paid on 31 May 2017 to shareholders on the register on
12 May 2017. The ex-dividend date is
11 May 2017.
Post-tax dividend cover over the quarter, based off the recently
increased dividend, was 106% (31 December
2016: 112%).
DEBT
Total borrowings at 31 March were £204.6 million, with a
weighted average interest rate of 4.2% (100% fixed) and a weighted
average debt maturity profile of approximately 11.7 years. Net
gearing, calculated as total debt less cash, as a proportion of
gross property value, was 27.4% (31 December
2016: 28.3%).
The Group currently has access to £53.0 million of undrawn
facilities. If drawn, interest will be charged at 175 basis points
over 3 month LIBOR, which is currently equivalent to 2.1% per
annum.
PORTFOLIO UPDATE
The like-for-like portfolio valuation increased 0.9% or £5.4
million, primarily as a result of our portfolio being positioned in
better performing sub-sectors of the market combined with the
active management and leasing activity completed during the
period.
The best performing sector in the portfolio was again
industrial, reflecting our on-going active management of these
assets as well as robust occupational demand, as detailed
below.
Occupancy was maintained at 94%, which is expected to improve
over the short term as we have completed a letting post quarter end
of our largest industrial void and as we make progress at 50
Farringdon Road, EC1.
As at 31 March 2017, the portfolio
had a net initial yield of 5.9% (based on contracted net income and
allowing for void holding costs) and a net reversionary yield of
6.9%. The weighted average unexpired lease term based on headline
rent was unchanged from the previous quarter at 5.7 years.
Key highlights in the quarter included:
Office
The final suite at Trident House, St.
Albans was leased, securing a rent of £0.1 million per annum
which was 27% ahead of ERV, 91% ahead of the previous passing rent
and at £38 per sq ft sets a record rent in this location.
At 50 Farringdon Road, a proposed transaction for leasing the
remaining space became abortive during the quarter. Despite this we
have good interest having relaunched the building in March.
The sale of a building at Waterside House, Bracknell, which was
vacant and required refurbishment, completed during the quarter
realising £1.54 million which was 9% ahead of the 31 December 2016 valuation. The sale of this
non-core vacant building improves our occupancy, reduces our void
holding costs and is in line with our business plan to grow the
average lot size. We have one further vacant building to dispose of
at this location.
Industrial
Space was let in Epsom, Luton
and Radlett securing a combined rent after incentives of £0.33
million per annum, 1% ahead of the December
2016 ERV.
We re-geared two leases in return for short rent free periods,
securing a combined £0.2 million per annum. At the same time, we
settled five rent reviews, securing £0.42 million per annum which
was a 12% increase on the passing rent and 3% ahead of the
December 2016 ERV.
Retail and Leisure
In line with our strategy to dispose of our smaller properties
once business plans are completed, we sold 2 Bath Street in Bath
for £2.75 million and, following considerable management, disposed
of Drury Lane in Oldham for £2.2
million. The combined sale price of these assets was 10% ahead of
the December 2016 valuation.
MARKET BACKGROUND
According to the MSCI IPD Monthly Index, the All Property total
return was 2.3% in the quarter to March
2017, compared to 2.6% in the quarter to December 2016. Capital growth was 0.9% over the
quarter, compared with 1.1% in the quarter to December 2016.
Across the principal IPD sectors, industrial capital values grew
by 2.4% (December 2016: 2.7%), office
by 0.6% (December 2016: 1.0%) and
retail by 0.3% (December 2016: 0.4%).
Out of a total of 37 segments (based on a rolling three months), 31
segments recorded positive capital growth compared to 29 last
quarter. Only the industrial sector saw a positive valuation
movement across all of its segments over the quarter.
Over the quarter to March 2017,
rental values rose by 0.3%, compared with 0.5% in the quarter to
December 2016. Across the principal
IPD sectors, industrial rental values grew by 1.0% (December 2016: 1.3%), office by 0.1%
(December 2016: 0.3%) and retail
recorded nil growth (December 2016:
0.3%). Over the quarter, 23 of the IPD segments recorded positive
rental growth compared to 29 segments last quarter. The industrial
sector primarily saw positive rental growth but this was more muted
in the office and retail sectors.
APPENDIX
NET ASSETS SUMMARY
The unaudited Net Asset Value is as follows:
|
31 Mar
2017
£million |
31 Dec
2016
£million |
30 Sept
2016
£million |
Investment properties
* |
615.2 |
615.6 |
621.1 |
Other assets |
18.6 |
17.6 |
24.1 |
Cash |
33.9 |
28.2 |
35.3 |
Other
liabilities |
(21.2) |
(22.1) |
(22.4) |
Borrowings: Loan facilities
ZDP’s |
(204.6)
- |
(204.9)
- |
(205.2)
(29.0) |
Net Assets |
441.9 |
434.4 |
423.9 |
Net Asset Value per
share |
81.8p |
80.4p |
78.5p |
* The investment property valuation is stated net of lease
incentives.
The movement in Net Asset Value can be summarised as follows:
|
Total |
Movement |
Per
share |
|
£million |
% |
Pence |
NAV at 31 December
2016 |
434.4 |
|
80.4 |
Movement in property
values |
7.2 |
1.7 |
1.4 |
Net income after tax
for the period |
4.9 |
1.1 |
0.9 |
Dividends paid |
(4.6) |
(1.1) |
(0.9) |
NAV at 31 March
2017 |
441.9 |
1.7 |
81.8 |
PORTFOLIO COMPOSITION
The portfolio consisted of 53 assets and an average lot size of
£11.8 million at the end of March
2017.
The Group’s portfolio is structured as follows:
Sector |
Portfolio
weightings
31 Mar 2017 |
Like
for like valuation change |
|
|
|
Industrial
sub-total |
40.1% |
2.1% |
South East |
26.9% |
|
Rest of UK |
13.2% |
|
|
|
|
Offices
sub-total |
34.3% |
0.3% |
South East |
21.4% |
|
Rest of UK |
8.7% |
|
City & West
End |
4.2% |
|
|
|
|
Retail and Leisure
sub-total |
25.6% |
-0.2% |
Retail warehouse |
10.4% |
|
High Street - Rest of
UK |
7.4% |
|
High Street - South
East |
5.6% |
|
Leisure |
2.2% |
|
|
|
|
Total |
100% |
0.9% |
TOP TEN ASSETS
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 |
ENDS