West End landlord Great Portland Estates (GPOR) admitted that uncertainty generated by the referendum result will damage values and rental growth until such times as clarity returns to the market. Until then, it has positioned itself well to withstand political inertia and the cloudy economic climate.
Including joint ventures, the loan-to-value ratio is extremely modest at 16 per cent, and there is £553m of cash and undrawn committed facilities to finance further investment. In the half year to September it made £71m of bolt-on acquisitions and generated £293m though disposals at a 0.5 per cent surplus to book value.
Tight supply meant that the decline in rental values was modest, and the drop in rental income was more a reflection of income lost through disposals. While down from 33 per cent at the March year-end, the reversionary element remained high at 29 per cent, equivalent to £29.2m if all rents were marked to market, and £3.2m of this was crystallised in the first half through new lettings secured above estimated rental value. Within the committed development programme, nearly three-quarters of all space has either been pre-let or pre-sold.
Analysts at Peel Hunt are forecasting adjusted net asset value of 805.5p at the March 2017 year-end (from 846.8p in 2016).
| GREAT PORTLAND ESTATES (GPOR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 618p | MARKET VALUE: | £2.13bn | |
| TOUCH: | 618-618.5p | 12-MONTH HIGH: | 891p | LOW: 535p |
| DIVIDEND YIELD: | 1.5% | TRADING PROP: | £232m | |
| DISCOUNT TO NAV: | 25% | |||
| INVESTMENT PROP: | £3.47bn* | £3.47bn* | 26% | |
| Half-yearto 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 799 | 371 | 109 | 3.6 |
| 2016 | 822 | -62.7 | -18.4 | 3.7 |
| % change | +3 | - | -117 | +3 |
Ex-div: 24 Nov Payment: 3 Jan *Including joint ventures | ||||
