U and I Group (UAI)- formerly Development Securities - spent the last year implementing its strategic objective of building a portfolio of larger regeneration projects, and over the next three to five years it is targeting post-tax total returns (net asset growth and dividends) of 12 per cent, and over £50m of development and trading gains per year. Management’s confident approach is reflected in the payment of another special dividend which, together with the ordinary dividend, gives a sector-leading yield of nearly 7 per cent.
Headline profits were down because there was virtually no revaluation gain on the portfolio which remained unchanged at £203m. But, crucially, total rental income grew by 8 per cent to £22.4m. Emphasis remained on sweating existing assets to generate revenue, and development and trading gains rose by 11.8 per cent to a record £51.1m. However, this came at a cost, with development expenses rising from £143m to £185m.
Key investment gains included a mixed-use site in north London, where it built a Morrisons food store and sold off the remainder of the site for retail and restaurants. Profits realised came to £8m. Two significant Public Private Partnership projects were also won, with a combined gross development value of £480m.
Analysts at Peel Hunt are forecasting adjusted net asset value (NAV) of 293p at the February 2017 year-end, from 290p a year earlier.
U AND I GROUP (UAI) | ||||
---|---|---|---|---|
ORD PRICE: | 203.25p | MARKET VALUE: | £254m | |
TOUCH: | 203-204.25p | 12-MONTH HIGH: | 293p | LOW: 178p |
DIVIDEND YIELD: | 2.9% | TRADING PROPERTIES: | £200m | |
DISCOUNT TO NAV: | 30% | |||
INVESTMENT PROP: | £254m# | NET DEBT: | 44% |
Year to 29 Feb | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2012** | 256 | -10.2 | -10.3 | 5.6 |
2013 | 251 | 0.8 | 2.0 | 5.6 |
2014 | 262 | 19.5 | 14.9 | 5.6 |
2015 | 276 | 34.8 | 26.8 | 5.9* |
2016 | 291 | 25.8 | 17.5 | 5.9* |
% change | +5 | -26 | -35 | - |
Ex-div: 21 Jul Payment: 19 Aug *Not including special dividend of 8p in 2015 and 2016 **14-month period #Including joint ventures |