A&J Mucklow (MKLW) is fortunate in owning prime industrial space in the Midlands just at a time when demand is growing. Typical lease incentives have fallen from 12-18 months to three to nine months of free rent on a typical five-year term, and in some cases rents have started to rise.
A sharp rise in headline profits at the interim stage reflects a £7.7m valuation uplift in the property portfolio, whereas underlying pre-tax profits actually fell from £6.9m to £6.3m. Gross rental income rose from £10.2m to £10.5m, but this was offset by a number of one-off items as well as higher financing costs.
The outlook is pretty encouraging, though. Occupancy rates have increased from 93.3 per cent to 93.8 per cent, and the first pre-let development since the credit crunch has been secured - the 115,000 sq ft distribution warehouse is due for completion next December. Two more properties were also added to the portfolio - a 62,000 sq ft industrial estate for £3.66m and three shops in Birmingham.
Oriel Securities expects adjusted net asset value to rise to 324p by June (from 305p in June 2013).
| A&J MUCKLOW (MKLW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 501p | MARKET VALUE: | £301m | |
| TOUCH: | 491-501p | 12-MONTH HIGH: | 515p | LOW: 340p |
| DIVIDEND YIELD: | 4.0% | TRADING PROP: | £0.45m | |
| PREMIUM TO NAV: | 59% | |||
| INVESTMENT PROP: | £278m | NET DEBT: | 41% | |
| Half-year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 303 | 8.1 | 13.5 | 8.78 |
| 2013 | 315 | 14.2 | 23.6 | 9.04 |
| % change | +4 | +75 | +75 | +3 |
Ex-div: 28 May Payment: 30 Jun | ||||
