Competition may be growing for assets in the regional property market, but Hansteen (HSTN) invested heavily at the low point of the economic cycle. The rewards of this strategy are clear from record interim profits.
The group has been busy selling properties and recycling the proceeds into new investments, picking up £143m of assets at an average yield of 11.3 per cent and with a vacancy rate of 18.7 per cent. This did not include the purchase of a further 9.2 per cent stake in the Ashtenne Industrial Fund for £26m, taking its holding up to 36.7 per cent.
There was a modest increase in net debt to £428m, even though the company's finances were strengthened by a £46m placing and open offer in April. Yet the loan-to-value ratio fell from 49.3 per cent to 45.9 per cent over the six months, thanks to valuation gains.
Rental income fell from £39.8m to £37.3m, after asset disposals and a 4 per cent slump in the Euro against sterling. But on a like-for-like basis rental income grew, and that trend should continue. For while Hansteen’s attributable investment portfolio currently yields 8.9 per cent, add in contracted rent and the figure rises to 9.3 per cent - and to 10.9 per cent if all vacancies are filled and rents marked to market.
Liberum is forecasting year-end adjusted net asset value of 104p (from 91p in 2013).
| HANSTEEN HOLDINGS (HSTN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 101p | MARKET VALUE: | £692m | |
| TOUCH: | 101-102p | 12-MONTH HIGH: | 115p | LOW: 96p |
| DIVIDEND YIELD: | 4.9% | DEVELOPMENT PROP: | £12.5m | |
| PREMIUM TO NAV: | 9% | |||
| INVESTMENT PROP: | £1.09bn | NET DEBT: | 67% | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 83 | 14.9 | 1.8 | 1.9 |
| 2014 | 93 | 66.7 | 9.2 | 2 |
| % change | +12 | +348 | +411 | +5 |
Ex-div: 23 Oct Payment: 20 Nov | ||||
