Midlands-based industrial landlord Mucklow continues to perform well, but the stunning share price gains of the past eight months sit uneasily with falling property values.
Strip out property revaluations and half-year pre-tax profit rose 10 per cent in the period to £13.4m. Rents have been flat, so that reflects a first-half reduction in the void rate to 6.5 per cent and - more importantly - acquisitions. With rental yields (8.1 per cent) much higher than the cost of debt (4.1 per cent), Mucklow has very sensibly been buying properties, including two last year for £5.8m. Yet its balance sheet remains very strong, with a lower loan-to-value ratio than most of the big real-estate investment trusts. Chairman Rupert Mucklow says he'll continue to buy if he can find sellers of well-located, modern properties.
The bad news was that the investment portfolio was written down by £15m - a fall of 5.6 per cent. That wiped out virtually all of the group's rental income in the reported results as well as reducing net asset value (NAV). Mr Mucklow blames a thin market, with little transactional evidence for surveyors to use in valuations.
Broker Arden Partners expects adjusted NAV per share to increase to 300p for 2013 (297p in 2012).
A & J MUCKLOW (MKLW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 361p | MARKET VALUE: | £217m | |
| TOUCH: | 351-365p | 12-MONTH HIGH : | 403p | LOW: 280p |
| DIVIDEND YIELD: | 5.3% | TRADING PROP: | £0.45m | |
| PREMIUM TO NAV: | 22% | |||
| INVESTMENT PROP: | £252m | NET DEBT: | 39% | |
| Year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 371 | -26.7 | -45.9 | 17.68 |
| 2009 | 266 | -52.0 | -86.7 | 17.68 |
| 2010 | 310 | 36.0 | 60.9 | 17.97 |
| 2011 | 314 | 12.9 | 22.4 | 18.51 |
| 2012 | 295 | 0.11 | 0.28 | 19.07 |
| % change | -6 | -99 | -99 | +3 |
Ex-div: 28 Nov Payment: 2 Jan | ||||
