Further evidence of the rude health of the UK property market was provided by Development Securities (DSC), which posted record profits for the year to February. The main contributor was a £45.7m development and trading gain, which helped boost adjusted net asset value by 8 per cent to 284p.
Notable milestones included a £4.4m gain on the group's main legacy asset in Edgware Road, London, and £6.7m from the now fully let office development in Hammersmith Grove. The group also broadened its current portfolio of projects through the acquisition of specialist regeneration developer Cathedral last May. This resulted in a further £10.2m gain from the partial disposal of Cathedral's residential development in Greenwich.
Recycling capital to finance new schemes remained a key focus, with £60.8m raised by moving out of assets that became fully developed. This helped fund six new assets costing £65.7m, two of which are in convenience retail - an area that now comprises nearly three-quarters of the investment portfolio.
Rental income from the investment portfolio fell 19 per cent to £10m, mainly as a result of disposals made during the year. However, significant acquisitions made in the second half are expected to drive rental income higher this year.
Analysts at Peel Hunt are forecasting adjusted net asset value for February 2016 of 300p a share (from 276p in 2015).
| DEVELOPMENT SECURITIES (DSC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 244.75p | MARKET VALUE: | £306m | |
| TOUCH: | 242.75-244.75p | 12-MONTH HIGH: | 256p | LOW: 173p |
| DIVIDEND YIELD: | 2.4% | TRADING PROPERTIES: | £217m | |
| DISCOUNT TO NAV: | 11% | |||
| INVESTMENT PROP: | £252m# | NET DEBT: | 36% | |
| Year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 297 | -11.4 | -16.8 | 4.8 |
| 2010 | 272 | 2.6 | 1.7 | 4.8 |
| Period to 28/29 Feb | ||||
| 2012** | 254 | -10.2 | -10.3 | 5.6 |
| 2013 | 262 | 19.5 | 14.9 | 5.6 |
| 2014 | 276 | 34.8 | 26.8 | 5.9* |
| % change | +5 | +78 | +80 | +5 |
Ex-div: 23 Jul Payment: 20 Aug *Not including special dividend of 8p **14-month period #Includes £48.8m in joint ventures | ||||
