These were impressive results from Metric Property. They show how active property managers can move the valuation needle in a flat market when they aren't held back by swathes of legacy assets.
Metric floated with 100p per share of cash in March 2010. Two years on and that 100p has turned into 107p of retail warehouses (adjusted for valuation movements in the derivative portfolio) even as sentiment towards the retail sector has deteriorated rapidly. Strip out acquisition and fund-raising costs and net asset value (NAV) would be 116p.
The largest – and most surprising – driver of NAV growth has been revaluations, which contributed 4.3p per share over the year, even as the wider market has shifted into reverse. Chief executive Andrew Jones attributes this to the group's brown field development projects, for which he typically buys a 1980s retail park, pre-lets it to retailers at affordable rents – the portfolio average is only £14.50 per sq ft – and then builds modern space.
Metric has substantial exposure to the more challenging retail sectors – furniture, DIY and electricals. But Mr Jones says he always buys thinking "if they weren't there, who would take it" – five of Metric's six outlets that went bust in the year were indeed re-let at higher rents.
Ahead of probable upgrades, broker Jefferies expects adjusted NAV of 101p for 2013.
METRIC PROPERTY INVESTMENTS (METP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 86p | MARKET VALUE: | £163m | |
| TOUCH: | 85-86p | 12-MONTH HIGH : | 115p | LOW: 79p |
| DIVIDEND YIELD: | 3.8% | TRADING PROP: | nil | |
| DISCOUNT TO NAV: | 19% | |||
| INVESTMENT PROP: | £235m | NET DEBT: | 15% | |
| Year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011* | 101 | 8.70 | 4.80 | 0.60 |
| 2012 | 106 | 13.2 | 6.90 | 3.30 |
| % change** | +14 | +64 | +56 | +496 |
Ex-div: 20 Jun Payment: 23 Jul *13 months **Annualised | ||||
