Europe may be burning, but London’s West End remains fireproof. That was the year-end message from Shaftesbury, which owns shops and restaurants across Covent Garden, China Town and Soho. The company’s adjusted net asset value (NAV) grew 11.8 per cent to 463p over the year, driven by a 7.2 per cent mark-up in the value of its property estate. The valuation surplus was even greater in the second half than in the first, suggesting the West End’s escapist magic remains an effective bulwark against the economic storms that broke in August.
Shaftesbury’s rental income (stripping out the effect of rent-free periods) rose from £68.3m to £77.5m, driving a generous dividend increase. Yet rental income is still some £14.7m below the rental value of the estate, as estimated by the company’s surveyor, DTZ. Assuming market rents do not fall - and they grew 7.5 per cent over the year to September - so-called 'reversionary' income growth is therefore embedded in the ongoing routine of rent reviews and lease expiries.
The group bought £64.9m of properties over the year, adding to all its ‘villages’ except Carnaby Street. This was funded by a £100m share placing in March, so net debt fell.
Brokerage Espirito Santo expects adjusted NAV to rise 6.7 per cent to 494p by September 2012.
SHAFTESBURY (SHB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 490p | MARKET VALUE: | £1.23bn | |
| TOUCH: | 489-490p | 12-MONTH HIGH: | 543p | LOW: 424p |
| DIVIDEND YIELD: | 2.3% | TRADING PROP: | nil | |
| PREMIUM TO NAV: | 16% | |||
| INVEST PROPERTIES: | £1.68bn | NET DEBT: | 47% | |
| Year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007* | 503 | 124 | 154.0 | 7.66 |
| 2008* | 370 | -221 | -97.4 | 11.00 |
| 2009* | 316 | -58 | -31.3 | 12.25 |
| 2010 | 380 | 172 | 73.6 | 10.25 |
| 2011 | 421 | 116 | 47.4 | 11.25 |
| % change | +11 | -33 | -36 | +10 |
Ex-div: 25 Jan Payment: 17 Feb *NAV and EPS figures adjusted for 2009 rights issue | ||||
