The plunge in Alpha Pyrenees’ net asset value (NAV) has more to do with currency than property. When the euro appreciates against sterling - as it did in the six months to 30 June - the investment trust registers paper losses on its currency hedges with Barclays, which will be unwound in 2013. This leads to significant volatility, even in the adjusted NAV figure, which fell from 34p to 29p over the six-month period.
By contrast, on a constant currency basis, the valuation of the property portfolio remained steady. A 0.2 per cent fall in the value of the French properties was offset by a 0.4 per cent gain in the value of the smaller Spanish estate. Rental income was also steady in euro terms though, in sterling, that translated into a slight gain. The vacancy rate has risen a percentage point in the six months to 11 per cent, however - despite the signing of various leases. All rents in the portfolio are hitched to price indices but, since inflation rates in France and Spain were weak last year, there were no rent increases during the period.
Broker Peel Hunt has downgraded its year-end NAV forecast to 35p.
ALPHA PYRENEES TRUST (ALPH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 30p | MARKET VALUE: | £35m | |
| TOUCH: | 30-31p | 12-MONTH HIGH: | 36p | LOW: 27p |
| DIVIDEND YIELD: | 12% | TRADING STOCK: | nil | |
| PREMIUM TO NAV: | 100% | |||
| INVEST PROPERTIES: | £266m | NET DEBT: | £203m | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 17.1 | 0.13 | 0.1 | 1.8 |
| 2011 | 15.0 | 0.97 | -0.1 | 1.8 |
| % change | -12 | +646 | - | - |
Ex-div: 14 Sep Payment: 10 Oct | ||||
