NAV, Dividend & IMS

RNS Number : 1935Y

Picton Property Income Limited

22 January 2014

 



22 January 2014

PICTON PROPERTY INCOME LIMITED

("Picton" or the "Company" or the "Group")

Net Asset Value as at 31 December 2013, Interim Dividend

and Interim Management Statement

Picton (LSE: PCTN) announces its Net Asset Value for the quarter ended 31 December 2013 and Interim Dividend.

The highlights over the quarter include:-

Financial

·      Net Assets increased to £204.3 million (30 September 2013: £180.3 million)

·      NAV/EPRA NAV per share rose 6.7% to 53.8 pence (30 September 2013: 50.4 pence)

·      Increase in underlying property portfolio valuation of 3.3% (30 September 2013: 1.4%)

·      Average debt maturity of 13.7 years, with a fixed weighted average interest rate maintained at 4.5% per annum

·      Raised £11.9 million through the issue of 22.2 million shares at 53.5 pence, a 6.2% premium to September NAV

Dividend

·      Dividend of 0.75 pence declared (30 September 2013: 0.75 pence)

·      Post-tax dividend cover over the quarter of 122% (30 September 2013: 126%)

·      Dividend yield of 5.4%, based on share price of 56.0 pence as at 31 December 2013

Portfolio Activity

·        Improvement in occupancy for fourth consecutive quarter to 91% (September 2013: 90%)

·        Completed letting of largest industrial void, at 7% ahead of ERV

·        Following planning permission completed the letting of largest retail void, at 3% ahead of ERV

·        Completed first phase of refurbishment at City Link, Croydon

·        Completed two disposals of smaller assets, at 15% ahead of September valuation

·        Acquired further unit at Angel Gate EC1

Commenting, Nick Thompson, Chairman of Picton said:

"The increase in NAV over the past quarter has been driven by a valuation uplift of 3.3%, enhanced by our capital structure and covered dividend.  Improving conditions in the broader economy have had a positive impact on valuations, arising from increased confidence and also activity in the regional markets outside Central London.  Against this backdrop, we are considering the optimal long term funding arrangements for the Group."

Michael Morris, Chief Executive of Picton Capital said:

"We are continuing to see progress in lettings as a result of our asset management initiatives, which, together with greater investment activity in the market, have resulted in improved valuations across the portfolio. We have also made good progress in continuing to reshape the underlying portfolio by selling two smaller assets and making a further acquisition increasing our holding at Angel Gate."

For further information:

Tavistock Communications

Jeremy Carey/James Verstringhe, 020 7920 3150, [e-mail]

Picton Capital Limited

Michael Morris, 020 7011 9978, [e-mail] 

The Company Secretary

Northern Trust International Fund Administration Services (Guernsey) Limited

Trafalgar Court

Les Banques

St Peter Port

Guernsey

GY1 3QL

David Sauvarin, 01481 745001, [e-mail]

Note to Editors

Picton Property Income Limited ('Picton') is an income focused, property investment company listed on the London and Channel Islands Stock Exchanges. Picton can invest both directly and indirectly in commercial property across the United Kingdom.

With Net Assets of £204.3 million at 31 December 2013 and approximately 860 investors, 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.  www.pictonproperty.co.uk

NET ASSET VALUE

The unaudited Net Asset Value ('NAV') of Picton, as at 31 December 2013, was £204.3 million, reflecting 53.8 pence per share, an increase of 6.7% over the quarter. 

The NAV attributable to the ordinary shares is calculated under International Financial Reporting Standards and incorporates the external portfolio valuation as at 31 December 2013, including income for the quarter, but does not include a provision for the quarterly dividend announced herein, which will be paid in February 2014.

The property portfolio will next be subject to an independent valuation during March 2014 and the NAV per share, as at 31 March 2014, will be issued in April 2014.

A detailed breakdown of the NAV is included within the Appendix.

DIVIDEND

An interim dividend of 0.75 pence per share is declared in respect of the period 1 October 2013 to 31 December 2013 (1 July 2013 to 30 September 2013: 0.75 pence).

The dividend will be paid on 28 February 2014 to shareholders on the register on 14 February 2014. The ex-dividend date will be 12 February 2014.

DEBT

The Company has a weighted average interest rate of 4.5%, of which 99% is fixed with a weighted average debt maturity profile of approximately 13.7 years.

As at 31 December 2013, net gearing, calculated as total debt, including ZDPs, less cash, as a proportion of gross property value, was 48.6% (September 2013: 53.5%). 

MARKET BACKGROUND

According to the IPD Monthly Index, total returns in the quarter to December were 4.7%, building on the momentum of the preceding quarter and the strongest result since May 2010 (September: 2.9%). 

Returns were driven by both income and improving capital growth. The income return was 1.7% and capital growth was 3.0%, two and a half times higher than that recorded for September.

Across the principal IPD sectors, office values rose by 4.9% (September 2013: 2.2%), industrial by 4.2% (September 2013: 1.7%) and retail by 1.6% (September 2013: 0.4%). Over the quarter 36 of the 37 IPD segments recorded positive movements compared to 28 in September, 17 in June and only 4 in March 2013.  In terms of rental growth 21 segments recorded positive rental growth compared to only 15 in September.

The occupancy rate on the Index was 91% in December an improvement from 90% in September 2013.

PORTFOLIO UPDATE

During the quarter we have successfully concluded a number of asset management initiatives which have created value and improved occupancy, the highlights of which are detailed below. All sectors recorded positive capital growth, except for leisure where a tenant failure led to an adverse valuation movement.

We have started to reshape the portfolio, taking advantage of improved liquidity to sell a number of smaller assets at a combined 15%premium to their September valuation, whilst also acquiring a further building at Angel Gate, EC1 at an attractive entry price.

Overall, rental growth was positive across the office and industrial assets, but still marginally negative in the retail and leisure sectors.

Highlights over the quarter include:-

Offices

·      Completed the first phase of a 29,000 sq ft refurbishment of City Link, Croydon. Up to 10,000 sq ft of Grade A space opposite East Croydon station is now ready for leasing www.citylink-croydon.co.uk 

·      Completed lettings and lease regears in Boundary House, EC3 and Longcross Court, Cardiff

·      Completed an agreement to lease at Building 900 Colchester Business Park for £200,000 per annum

·      In Swindon, where space has been returned following lease expiry, we are now able to bring forward a residential/mixed use development on this six acre site

Industrial

·      Sold Highgrove Industrial Estate in Portsmouth and Heron Industrial Estate, Spencers Wood, Reading for £4.89 million, 15% above the September valuation

·      Let remaining unit at River Way, Harlow at £340,000 per annum, 8% ahead of ERV. The estate is now fully let

·      Completed lettings and lease regears in Wokingham, Luton, Epsom and Newtonabbey

·      Completed the assignment of Vigo 250, Washington to Snorkel Europe Limited, from Tanfield plc

Retail

·      Following receipt of planning permission, Unit 3, Parc Tawe, Swansea was let at £155,000 per annum, 3% ahead of the September ERV. The park is now fully let

·      At Stanford House in Covent Garden and following completion of the office lettings, we have now received planning consent for a change of use to residential on the 2^nd, 3^rd and 4^th floors, which can be implemented from 2015 onward

·      Re-let two smaller vacant units in Huddersfield following tenant failures in December 2012 and July 2013 respectively

As at 31 December 2013, the portfolio had a net initial yield of 6.8% and a net reversionary yield of 7.8%. The weighted average unexpired term (to first termination) was 6.5 years.

Appendix

NET ASSETS SUMMARY

The unaudited NAV is as follows:

	31 Dec 2013 £million	30 Sept 2013 £million	30 June 2013 £million
Investment properties *	406.0	396.7	382.3
Other assets	13.6	13.8	12.3
Cash	34.4	19.2	24.7
Other liabilities	(15.7)	(15.7)	(16.1)
Borrowings: Loan facilities                     Loan stock                     ZDP's	(207.9) (2.1) (24.0)	(208.1) (2.1) (23.5)	(208.4) (2.1) (23.1)
Net Assets	204.3	180.3	169.6
Net Asset Value per share	53.8p	50.4p	49.1p

* The underlying property valuation is stated net of lease incentives.

The movements in Net Asset Value can be summarised as follows;

	Total	Movement	Per share
	£million	%	Pence
NAV at 30 September 2013	180.3		50.4
Movement in property values	11.7	6.1	3.1
Share issue	11.2	-	-
Share premium	0.5	0.3	0.1
Net income after tax for the period	3.3	1.7	0.9
Dividends paid	(2.7)	(1.4)	(0.7)
NAV at 31 December 2013	204.3	6.7	53.8

PORTFOLIO COMPOSITION

The Company's current portfolio is structured as follows:-

Sector	Weighting 31 December 2013	Like for Like Valuation Change
Industrial	36.6%	3.7%
Retail	18.9%	3.1%
Office - Central/Greater London	19.3%	5.3%
Office - Rest of UK	14.4%	2.5%
Retail Warehouse	6.7%	3.5%
Leisure	4.1%	-6.3%
Total	100%	3.3%

GEOGRAPHICAL WEIGHTINGS

Geography	Weighting 31 December 2013
Central & Greater London	31.0%
South East	27.2%
Midlands	16.6%
North	14.4%
Wales	5.4%
South West	3.1%
Scotland	1.8%
Northern Ireland	0.5%
Total	100%

TOP TEN ASSETS

The top ten assets, which represent 47.9% of the portfolio by capital value, are detailed below.

Asset	Sector	Location
River Way Industrial Estate, Harlow	Industrial	South East
Unit 5320 Magna Park, Lutterworth	Industrial	Midlands
Stanford House, Long Acre, WC2	Retail	London
Angel Gate Office Village, City Road, EC1	Office	London
50 Farringdon Road, EC1	Office	London
Phase II Parc Tawe, Swansea	Retail Warehouse	Wales
Boundary House, Jewry Street, EC3	Office	London
1 Chancery Lane, WC2	Office	London
Colchester Business Park, Colchester	Office	South East
Angouleme Way, Bury	Retail Warehouse	North

 

END

 

 

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