LondonMetric Property (LMP) delivered a robust first-half performance. Much of the focus was on repositioning its property portfolio away from offices and London housing and into the retail distribution sector - a shift that reflects retailing trends such as the rise of 'click and collect'.
Office and residential disposals totalled £90m in the first half, but after the period-end there were further disposals worth £198m. There are now just three non-core assets within the portfolio, valued at £142m. Nearly 90 per cent of gross assets are instead in out-of-town retail parks and retail distribution warehouses. The portfolio was valued at £1.35bn, which includes a £52m valuation uplift. There were seven acquisitions at a total cost of £136m and a net initial yield of 6.5 per cent. This compares favourably with the 5.2 per cent average yield achieved on disposals.
Net rental income rose 13 per cent to £28.3m. Only 4 per cent of this expires in the next five years, while the average unexpired lease length was up slightly, at 13 years. Growth prospects look solid, too: leases were signed at levels 4.1 per cent above year-end rental estimates and 6.8 per cent above previous rents.
The analysts at Peel Hunt are forecasting year-end adjusted book value of 137p a share (from 121p in 2014).
| LONDONMETRIC PROPERTY (LMP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 151p | MARKET VALUE: | £948m | |
| TOUCH: | 151-152p | 12-MONTH HIGH: | 152p | LOW: 125p |
| DIVIDEND YIELD: | 4.6% | TRADING PROP: | nil | |
| PREMIUM TO NAV: | 17% | |||
| INVESTMENT PROP: | £1.27bn* | NET DEBT: | 66%* | |
| Half-year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 111 | 44.7 | 7.0 | 3.5 |
| 2014 | 129 | 70.4 | 11.2 | 3.5 |
| % change | +16 | +57 | +60 | - |
Ex-div:04 Dec Payment:19 Dec *Includes joint ventures | ||||
