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Alpha Pyrenees is useful for income

TIP UPDATE: A more stable French property market has masked weak occupancy rates at Alpha Pyrenees - but the yield is hard to ignore
March 25, 2011

Alpha Pyrenees mistimed the property cycle spectacularly, raising money in late 2005 to buy French and Spanish real estate in 2006 and 2007 - just before the crash. But now that it has written down its portfolio and rebased dividends at the more realistic level of 0.9p per quarter, it functions as a useful income booster.

IC TIP: Buy at 31p

The most encouraging figure in its 2010 results was the portfolio capital growth of 0.3 per cent. Its French buildings were worth 0.8 per cent more at the year-end and the Spanish ones 5.1 per cent less - but, because the portfolio is skewed heavily towards France, the trust posted its first valuation gain since 2007.

The bad news was that, after stripping out property revaluation and other non-cash effects, the trust's income actually fell to 3.6p a share - all of which was distributed to shareholders. The trust owns offices and warehouses but has struggled to maintain occupancy rates despite a blue-chip tenant list and locations around Paris. Fund manager Paul Cable says an empty office in St Cyr L'Ecole is the main drag on earnings.

ALPHA PYRENEES TRUST (ALPH)

ORD PRICE:31pMARKET VALUE:£36m
TOUCH:31-32p12M HIGH / LOW34p24p
DIVIDEND YIELD:11.6%TRADING STOCK:NIL
PREMIUM TO NAV:81%
INVEST PROPERTIES:£254mNET DEBT:£195m

Year to 31 DecNet asset value (p)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
200690.3-2.70-1.705.00
200797.111.74.706.00
200855.5-64.1-54.46.60
200916.5-31.6-26.97.00
201017.15.804.903.60
% change+4---49

Ex-div30 Mar

Payment:26 Apr

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