Quintain's (QED) half-year results don't reflect this month's big news - the sale of the North Greenwich regeneration project for £230m. That deal crystallised £33.7m, or 6p a share, of profit, taking book value to 112p. Crucially, it also reduced the London developer's debt load to £175m, giving a more normal gearing level of 32 per cent. This recapitalisation closes a painfully impotent chapter in Quintain's history. Reinvestment and growth should now follow - but where?
Chief executive Max James cites three areas. The most important is the company's huge regeneration project around Wembley Arena in North London. Quintain now has the balance sheet to move onto Phase Two of its masterplan: it's seeking detailed planning consent to build 475 mid-market flats in seven blocks around a private garden. These would be adjacent to the Hilton hotel and the London Designer Outlet (opened last month and 83 per cent let) that constituted Phase One.
The other two areas targeted for investment are the iQ student accommodation fund, in which Quintain owns a 50 per cent stake, and the London portfolio. This latter is more aspiration than reality. Last year Quintain bought asset management boutique Grafton, which manages a West End office fund; Mr James wants to use Grafton's expertise to take on central London development projects.
Broker Peel Hunt expects year-end adjusted book value of 115p, up from 113p following the Greenwich sale.
QUINTAIN ESTATES & DEVELOPMENT (QED) | ||||
|---|---|---|---|---|
| ORD PRICE: | 94p | MARKET VALUE: | £490m | |
| TOUCH: | 93.5-94p | 12-MONTH HIGH: | 101p | LOW: 52p |
| DIVIDEND YIELD: | nil | TRADING PROPERTIES: | £9.6m | |
| DISCOUNT TO NAV: | 11% | NET DEBT: | 82% | |
| INVESTMENT PROPERTIES: | £762m | |||
| Half-year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 106 | -25.2 | -3.80 | nil |
| 2013 | 106 | 8.00 | 1.40 | nil |
| % change | - | -132 | -137 | - |
Ex-div: - Payment: - | ||||
