London landlord Workspace (WKP) posted annual results that more than justify its dramatic rerating over the past year. Its portfolio was marked up 8 per cent, thanks to a mixture of growing rents and planning gains on redevelopment sites, buoying adjusted net asset value (NAV) by 13 per cent to 348p per share. The company's income performance was equally impressive, with occupancy rising from 87.7 per cent to 89.8 per cent - even as the average rent increased by 6.6 per cent.
Chief executive Jamie Hopkins attributed the strong growth in the rent roll to the "health and prosperity" of Workpace's tenant base - London small businesses and start-ups, often in the technology or media sectors. Last year was interrupted by the Jubilee and Olympics, he notes, but letting activity bounced back strongly on both the occasions.
Workspace is also profiting from the buoyancy of the London housing market by redeveloping under-used inner City assets. Last month, it received planning consent for 800 homes on a business park in Bermondsey; it will now sell the residential plot to a housebuilder while retaining a smaller site for offices. The idea is to turn old white-van enclaves into mixed-use communities with homes, offices, gyms, cafés and the like.
Broker Espirito Santo expects adjusted NAV of 391p for 2014.
WORKSPACE (WKP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 390p | MARKET VALUE: | £565m | |
| TOUCH: | 389-390p | 12-MONTHHIGH: | 425p | LOW: 221p |
| DIVIDEND YIELD: | 2.5% | TRADING PROP: | nil | |
| PREMIUM TO NAV | 12% | |||
| INVESTMENT PROP: | £847m | NET DEBT: | 66% | |
| Year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 234 | -360.4 | -1,304.5 | 15.9 |
| 2010 | 243 | 26.0 | 21.8 | 7.27 |
| 2011 | 283 | 52.8 | 45.4 | 7.99 |
| 2012 | 305 | 48.5 | 36.3 | 8.79 |
| 2013 | 348 | 76.4 | 53.3 | 9.67 |
| % change | +14 | +58 | +47 | +10 |
Ex-div: 10 Jul Payment: 2 Aug | ||||
