A 4.4 per cent increase in the portfolio valuation at Segro (SGRO) over the half year highlights the benefits of 2013's rationalisation programme. But last year's disposals also resulted in a dip in the industrial landlord's net rental income - down by a quarter on the 2013 interim to £87.5m under European Public Real Estate Association (EPRA) accounting standards. That reduced adjusted profits and left no room for a dividend increase.
On a like-for-like basis, Segro achieved net rental growth of 4.9 per cent in the UK portfolio, driven by a healthy level of leasing activity against an improving market backdrop. Unfortunately, that was offset by poor performance in France, which saw a number of tenants go bust in late 2013. At least group vacancy rates headed in the right direction, down 20 basis points from the December year-end to 8.3 per cent.
In a separate announcement, Segro confirmed it had bought the remaining 50 per cent interest in its Logistics Property Partnership (LPP) joint venture from Moorfield Real Estate Fund II for £95.6m. The gross value of the properties amounts to £350m and provides a net rental yield of 5.4 per cent, based on the purchase price.
Oriel Securities expects book value of 355p a share at the 2014 year-end, rising to 404p a year later.
SEGRO (SGRO) | ||||
---|---|---|---|---|
ORD PRICE: | 360p | MARKET VALUE: | £2.7bn | |
TOUCH: | 359p-361p | 12-MONTH HIGH | 379p | Low: 279p |
DIVIDEND YIELD: | 3.2% | TRADING PROPERTIES: | £126m | |
PREMIUM TO NAV: | 7.5% | NET DEBT: | 67% | |
INVESTMENT PROPERTIES: | £3.1bn |
Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2013 | 297 | 20 | 2.2 | 4.9 |
2014 | 335 | 227 | 29.4 | 4.9 |
% change | +13 | +1035 | +1236 | - |
Ex-div: 20 Aug Payment: 2 Aug |