Segro (SGRO) has been relatively immune to the post-referendum turmoil, as demand for industrial warehouses shows little sign of diminishing. Development gains and higher rental income helped to drive adjusted net asset value up by 2.6 per cent to 475p a share, although a near-bottoming out in yield compression trimmed the valuation surplus in the six months to June back from £234m a year earlier to £81m.
Net rental income grew by nearly 4 per cent to £88.6m, and there is plenty more in the pipeline. Around £125m will be needed to complete the current development pipeline, most of which will be completed in the second half of this year, and will bring in new rent of £26.5m, with two-thirds of the programme already pre-let. A further £160m will be used on new sites, generating an additional £15m in rent. Disposals of non-core assets generated revenue of £383m.
Vacancy levels remained at a record low of 4.8 per cent, while the level of incentives for new leases represented 7.5 per cent of headline rent, down from 8.2 per cent in the first half of the previous year. Nearly a fifth of net rental income is generated overseas: France in particular experienced a strong take-up of space, and there is now less than a year's supply of available space, compared with nearly two years' supply in 2010.
Analysts at Peel Hunt are forecasting adjusted net asset value at the December year-end of 471p, from 463p a year earlier.
| SEGRO (SGRO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 437.1p | MARKET VALUE: | £3.29bn | |
| TOUCH: | 437-438p | 12-MONTH HIGH: | 467p | LOW: 331p |
| DIVIDEND YIELD: | 3.6% | TRADING PROPERTIES: | £33m | |
| DISCOUNT TO NAV: | 10% | NET DEBT: | 58% | |
| INVESTMENT PROPERTIES: | £5.49bn* | |||
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 424 | 330 | 44.4 | 5 |
| 2016 | 485 | 201 | 25.9 | 5.2 |
| % change | +14 | -39 | -42 | +4 |
Ex-div: 18 Aug Payment: 30 Sep *Includes investment in joint ventures | ||||
