Dawnay Day Carpathian has warned shareholders that it expects to cut its dividend by 20 per cent this year to help the central and eastern European (CEE) property investor cope with tougher market conditions. The 8p dividend that has now been pencilled in for 2008 still represents a generous 9.5 per cent yield.
About 7p of this year’s dividend payment was covered by the rents less costs, and property disposals would have been required to maintain the payout this year. However, given tougher market conditions for CEE property sellers, especially sellers of lower-spec property, Dawnay Day Carpathian does not want to be forced to do deals to fulfil its dividend promises. But it still expects to make some disposals this year.
Investment in building in the CEE region has been such that rents and values could now be set to suffer in certain areas. Still, Carpathian reckons the defensive nature of the properties it has invested in should help protect it if and when some of the heat comes out of the market. And on the bright side, Carpathian thinks there could be buying opportunities from distressed sellers.
Broker Numis Securities forecasts an adjusted 2008 net asset value of 144p.
| Dawnay Day Carpathian (DDC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 84p | MARKET VALUE: | £192m | |
| TOUCH: | 83-84 | 12-MONTH HIGH | 130p | LOW: 73p |
| DIVIDEND YIELD: | 11.9% | TRADING STOCK: | nil | |
| DISCOUNT TO NAV: | 39% | |||
| INVEST PROPERTIES: | £523m | NET DEBT: | 87% | |
| Year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 98 | 5.6 | 4.8 | nil |
| 2006 | 127 | 46.8 | 21.1 | 6.0 |
| 2007 | 137 | 21.9 | 8.3 | 10.0 |
| % change | +8 | -53 | -61 | +67 |
Ex-div: na Payment: na | ||||
