Industrial property giant Segro saw vacancy rates on its portfolio slip out to 14 per cent in the first half of the year, despite generating £20m of new rental income from lettings in the period (a 42 per cent increase year-on-year).
The group blamed the higher space returned on an insolvent tenant, and although it's only a half percentage point shift out from full-year results, improving this figure is the key driver of dividend growth, as vacant buildings are still liable for "empty rates" charges.
Rising property values bolstered the balance sheet to the tune of £64.5m; the value of Segro's UK portfolio moved up 2.5 per cent, but its European holdings shifted down 1.4 per cent. The weakening Euro took 6p off net asset value per share.
However, rental growth has turned positive in London, Belgium, Germany and Poland, a faster recovery than analysts had expected. Earnings were boosted by a £2.5m saving in administration expenses, as further synergies were derived from the .
Disposals of £321m were made in the period, including the sale of properties into a new .
Broker Panmure Gordon forecasts NAV of 363p in 2010.
| SEGRO (SGRO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 267p | MARKET VALUE: | £1.98bn | |
| TOUCH: | 267-268p | 12M HIGH: | 403p | LOW: 244p |
| DIVIDEND YIELD: | 5.3% | TRADING STOCK: | £31.3m | |
| DISCOUNT TO NAV: | 25% | |||
| INVEST PROPERTIES: | £4.54bn | NET DEBT: | 85% | |
| Half year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 341 | -493 | -113 | 4.60 |
| 2010 | 358 | 149 | 20.8 | 4.70 |
| % change | +5 | - | - | +2 |
Ex-div: 08 Sep Payment: 08 Oct | ||||
