Retail landlord Metric's shares have slid this year as investors have shunned anything with exposure to regional shopping. But these results show it's still possible to make modest returns in the sector if you manage your properties intensively. The value of Metric's portfolio of retail parks was marked up 1.5 per cent over the six months - compared to 0.4 per cent for the benchmark - thanks to new lettings.
Metric's turnaround job on the three stores leased to Focus DIY, which went bust in May, is particularly impressive. It has already re-let roughly 90 per cent of the space, with the balance in negotiations, for a higher total rent. The portfolio's average lease length to expiry - a key measure of income reliability - is now 12.1 years, with a healthy 11.4 years to the first break. Such is the benefit of not owning 'legacy' assets (Metric only launched last year).
The company also announced a new joint venture (JV) with the Universities Superannuation Scheme. The JV, to which Metric will contribute £25m of a total £150m in equity and debt, will invest in small, relatively mature retail parks that would otherwise fall under Metric's radar.
JPMorgan Cazenove expects adjusted full-year NAV of 108p (104p at the half-year).
METRIC PROPERTY INVESTMENTS (METP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 92p | MARKET VALUE: | £ 175m | |
| TOUCH: | 91-94p | 12M HIGH / LOW | 116p | 90p |
| DIVIDEND YIELD: | 1.7% | TRADING PROP: | nil | |
| DISCOUNT TO NAV: | 11% | |||
| INVEST PROPERTIES: | £229m | NET DEBT: | 12% | |
| Half-year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010* | 97 | 1.7 | 1.7 | nil |
| 2011 | 103 | 6.0 | 3.2 | 1.0 |
| % change | +6 | +259 | +88 | - |
Ex-div: 23 Nov Payment: 21 Dec *7 months to 30 Sep | ||||
