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Plenty in store at Urban&Civic

Proving serviced plots ready for housebuilders is becoming big business.
May 30, 2017

Providing brownfield sites ready for development by housebuilders means that Urban&Civic (UANC) is already doing what recent government proposals are encouraging; and that is to facilitate more housebuilding.

IC TIP: Buy at 269.75p

Using a license model, the company provides serviced plots and receives around one-third of the sales value when a house is sold. It currently has around 1,300 plots spread across sites at Alconbury, Rugby and Newark, and are likely to generate about £125m in cash. Even more important, capital spending at Alconbury has peaked, which means that cash coming in will now outweigh investment capital going out. And the same situation is rapidly approaching at Rugby. There is also a very strong pipeline of work that includes a joint planning application with the Secretary of State for Defence for 6,500 new homes at a site in Cambridge, and the acquisition of a 33 per cent interest in 2,800 homes, also to be built in Cambridge. All in all, Urban&Civic now has interests in nearly 33,000 plots, mostly within 100 miles of London.

Analysts at Stifel are forecasting adjusted net asset value (NAV) of 297p at the September 2017 year-end (from 284p in 2016).

URBAN&CIVIC (UANC)
ORD PRICE:269.75pMARKET VALUE:£391m
TOUCH:265-269.75p12-MONTH HIGH:275pLOW: 183p
DIVIDEND YIELD:1.1%DEVELOPMENT PROPERTIES:£219m
PREMIUM TO NAV:6%NET DEBT:11%
INVESTMENT PROPERTIES:£188m*

Half-year to 31 MarNet asset value (p)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20162448.44.61.1
20172554.22.81.2
% change+4-51-39+9

Ex-div: 8 Jun

Payment: 21 Jul

*Includes joint ventures