Sirius Real Estate (SRE) delivered a very strong performance in the year to March 2017, benefiting from a strong commercial property market in Germany. However, funds from disposals totalled €110m (£96m), and rental income will be lower until the proceeds are put to work. To offset this, the dividend payout may be increased to above 65 per cent of funds from operations, or there may be a special dividend payment.
Rental income grew by nearly a quarter to €68.8m (£60m) and, unlike a majority of UK-focused property companies reporting this year, at €49.8m the valuation uplift on the portfolio was actually higher than in the previous year. All this meant that adjusted net asset value per share grew by a sector-leading 10.3 per cent to 58.8¢.
Growing demand for space helped to lift like-for-like occupancy from 80 per cent to 82 per cent, while rents per square metre rose from €5.06 to €5.27. The capital expenditure programme started just over three years ago focused on refurbishing sub-optimal space where there was little or no rental income. Around three-quarters of this has been completed, and the returns are high. For total capex of €14.2m, annualised rental income of €8.7m has been achieved, representing a return on investment of 61 per cent.
Analysts at Peel Hunt are forecasting adjusted net asset value at March 2018 of 63¢ a share.
SIRIUS REAL ESTATE (SRE) | ||||
---|---|---|---|---|
ORD PRICE: | 59p | MARKET VALUE: | £518m | |
TOUCH: | 58-59p | 12-MONTH HIGH: | 79p | LOW: 42p |
DIVIDEND YIELD: | 4.9% | TRADING PROPERTIES: | €96m | |
PREMIUM TO NAV: | 19% | |||
INVESTMENT PROP: | €727m | NET DEBT: | 59% |
Year to 31 Mar | Net asset value (¢) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
---|---|---|---|---|
2013 | 47.6 | -29.5 | -9.5 | nil |
2014 | 43.6 | 31.0 | 7.3 | 0.3 |
2015 | 45.7 | 32.7 | 4.8 | 1.61 |
2016 | 51.5 | 57.1 | 7.5 | 2.22 |
2017 | 56.4 | 76.4 | 8.1 | 2.92 |
% change | +10 | +34 | +8 | +32 |
Ex-div:13 Jul Payment:18 Aug £1=€1.14 |