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Segro, the industrial property real-estate investment trust (Reit), reported total valuation losses of £395m at its half-year results. The reduction was driven by a valuation deficit of 10.4 per cent on Segro's UK property portfolio, which includes the Slough Trading Estate. That wiped out a 0.7 per cent gain on its European properties, which account for a third of its portfolio. Additionally, the value of Segro's UK development landbank was written down by £50.7m, a fall of 21 per cent.
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Stripping out valuation movements, underlying operating profits held steady at £67.4m. Although UK lettings were down 24 per cent year-on-year by size, net rental income rose 23 per cent in the period to £119m, and Segro's overall vacancy rate was steady at 9.3 per cent - healthier than the 18.7 per cent reported last week at rival Brixton.
Property disposals raised £152m in the period, while 39 per cent of space under construction has been pre-let or sold. Finance director David Sleath said the government's empty rates tax would cost Segro £6m this year, despite the demolition of 450,000 sq ft of empty buildings.
Broker Lehman Brothers has cut its full-year net asset value (NAV) forecast by 6.5 per cent to 544p.
| SEGRO (SGRO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 408p | MARKET VALUE: | £1.78bn | |
| TOUCH: | 407-408p | 12-MONTH HIGH: | 554p | LOW: 348p |
| DIVIDEND YIELD: | 2.1% | TRADING STOCK: | £342m | |
| DISCOUNT TO NAV: | 33% | |||
| INVEST PROPERTIES: | £4.29bn | NET DEBT: | 81% | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 756 | 195.4 | 41.2 | 8.3 |
| 2008 | 605 | -315.3 | -74.8 | 8.3 |
| % change | -20 | - | - | - |
Ex-div: 3 Sep Payment: 3 Oct |
||||
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Segro's operational performance is more robust than its rivals, but despite the discount to NAV, softening property values mean its shares are fairly priced.
Last IC view: Good value, 503p, 10 Mar 2008.
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-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
