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Hansteen's demand rises as goods move from shops to sheds

Brexit may cool sentiment until June, but Hansteen is set to deliver strong returns in the longer term
March 15, 2016

Focusing on light industrial property, which tends to be a late cycle performer, Hansteen (HSTN) continued to show strong growth in 2015, and a combination of a portfolio valuation uplift and a healthy dividend translated into a total shareholder return of 17.6p.

IC TIP: Buy at 111.2p

Normalised income profit, which excludes profits or losses from property sales, would have been 10.6 per cent higher at £52.2m, but with nearly half of its property investments in Germany, the euro's decline meant that in sterling terms profit was down from £48.2m to £47.2m. However, headline profit was boosted by a valuation uplift of £110.8m, significantly ahead of the £62.9m revaluation surplus recorded a year earlier. Hansteen also made a net £4.7m profit from the £192.1m sale of Hansteen Property Unit Trust, while other sales generated a further £8.7m in profit.

There was also further progress in building its stake in the Ashtenne Industrial Fund Unit Trust, a vehicle set up and then sold by Hansteen in 2005. Three transactions saw Hansteen's stake jump from 36.7 per cent to 81.8 per cent, at a bargain 8.4 per cent discount to the trust's net asset value.

Analysts at Peel Hunt are forecasting adjusted net asset value at December 2016 of 115p, compared with 111p a year earlier.

HANSTEEN (HSTN)
ORD PRICE:111.2pMARKET VALUE:£828m
TOUCH:110.9-111.2p12-MONTH HIGH:126pLOW: 103p
DIVIDEND YIELD:4.7%TRADING PROPERTIES:£10.8m
PREMIUM TO NAV:6%NET DEBT: 59%
INVESTMENT PROPERTIES:£1.06bn

Year to 31 DecNet asset value (p)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
2011808.91.34
20128146.26.24.5
20138665.39.14.8
20149913117.65
201510517121.35.25*
% change+6+31+21+5

Ex-div: 21 Apr

Payment: 19 May

*Excludes special dividend of 3p a share