Hansteen is in fine shape. Stripping out one-off items and property valuations, profits were up 21 per cent. Property valuations were also surprisingly resilient, with overall growth of 0.8 per cent. It’s testament to the strength of the industrial landlord’s business model that it can deliver big and growing dividends even as the secondary property markets in which it operates continue to weaken.
Net asset value (NAV) did fall slightly, but that was mainly due to the payment of the larger final dividend and currency movements. Around 84 per cent of Hansteen’s wholly-owned portfolio is in the eurozone - mainly Germany - so the euro’s decline against sterling has hit both its earnings and the value of its assets, as reported in sterling. Conversely, it has made overseas acquisitions cheaper - Hansteen bought six properties for €26m (£20.6m) over the period.
Hansteen can afford big dividends because the rental yield of its portfolio is high - 8.4 per cent on average - while its cost of debt is very low at 3.3 per cent. At the same time, the dividends should continue to grow as the company makes further acquisitions from deleveraging banks and as it gradually fills up the 20 per cent of its portfolio that remains vacant.
Brokerage Investec expects adjusted NAV of 86p by year-end, up from 81p at 30 June.
HANSTEEN HOLDINGS (HSTN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 74p | MARKET VALUE: | £473m | |
| TOUCH: | 73-74p | 12-MONTH HIGH: | 83p | LOW: 67p |
| DIVIDEND YIELD: | 5.7% | TRADING PROP: | £20.1m | |
| DISCOUNT TO NAV: | 6% | |||
| INVESTMENT PROP: | £760m | NET DEBT: | 60% | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 80 | 16.8 | 2.8 | 1.6 |
| 2012 | 79 | 23.7 | 3.2 | 1.8 |
| % change | -1 | +41 | +14 | +13 |
Ex-div: 24 Oct Payment: 22 Nov | ||||
