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Guernsey based property company Mapeley was up against some strong comparatives from last year, but still managed to increase its funds from operations - a key measure of its underlying operating performance - from £24.6m to £27.5m. The improvement was driven primarily by income from investment properties acquired during the first half and the realised profit on the disposal of non-current assets.
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The group's core operation is divided into two segments - outsourcing contracts and the direct property investments portfolio. A bulk of the real-estate portfolio is let to government or investment grade tenants, and the direct property investment portfolio has an average lease length of just under eight years, giving a much more visible revenue stream. These two portfolios combined to give a very low vacancy rate of just 1.3 per cent.
Outsourcing revenue, where the company keeps the difference between the income it receives from its outsourcing clients and its rental obligations, rose by £15.9m of which £14.2m came from its contract with the government's Identity and Passport Service. This contract saw an additional 26 sites acquired in the first half, bringing the total to 60, and a further nine will be added in the second half. Lehman currently expects full-year EPS of 289p (200p in 2006).
| MAPELEY(MAY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,781p | MARKET VALUE: | £821m | |
| TOUCH: | 2,771-2,781p | 12M HIGH: | 4,015p | LOW: 2,777p |
| DIVIDEND YIELD: | 6.5% | TRADING STOCK: | £3m | |
| PREMIUM TO NAV: | 10.2% | |||
| INVEST PROPERTIES: | £1.67bn | NET DEBT: | 185% | |
| Half year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 2,290 | 26.8 | 103 | 80 |
| 2007 | 2,532 | 30.2 | 97 | 94 |
| % change | +11 | +13 | -6 | +18 |
Ex-div: 8 Aug* Payment: 24 Aug* *Second quarter dividend of 47p a share |
||||
While higher interest rates have put pressure on net income spreads, Mapeley retains a strong pipeline of new business. Trading on a modest premium to net assets and offering a chunky dividend yield, the shares rate good value.
Last IC view: Good value, 3,834p, 16 March 2007
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-IC-1.6.1b-prod - 17/12/2008 12:46:12 - jonathan.furseftb
