It was a quiet second half for London & Stamford, but this may soon change – executive chairman Raymond Mould says he has four properties worth about £300m in total under offer. He won't divulge what until the transactions are completed, but he singles out London housing and distribution warehouse markets as offering potential for rental growth. With £137m of cash on its balance sheet as well as committed funds from its Middle Eastern joint-venture partner Green Park, the company has investment firepower of about £900m in total.
Reported profits for the year to 31 March 2012 were well down on the prior year because the property market has been virtually flat, depriving the company of the huge revaluation surpluses that swelled the balance sheet in 2009 and 2010. Strip these out – along with derivative movements and costs associated with the fund's expensive transformation into a real-estate investment trust – and adjusted profits rose by 52 per cent to £24m.
Net asset value (NAV) per share fell, though, because reported profits could not match the 6.8p paid in dividends during the year. Mr Mould, nonetheless, insists that progressive dividends are sustainable because of the potential acquisition pipeline.
Broker Peel Hunt expects adjusted NAV of 113p next March (113p in March 2012).
LONDON & STAMFORD (LSP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 107p | MARKET VALUE: | £581m | |
| TOUCH: | 106.5-106.9p | 12-MONTH HIGH : | 140p | LOW: 100p |
| DIVIDEND YIELD: | 6.5% | TRADING PROP: | £3.8m | |
| DISCOUNT TO NAV: | 8% | |||
| INVESTMENT PROP: | £824m | NET DEBT: | 29% | |
| Year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 98 | 1.0 | 0.1 | 1.60 |
| 2009 | 102 | 20.1 | 8.4 | 4.00 |
| 2010 | 120 | 104.8 | 24.8 | 4.40 |
| 2011 | 123 | 56.8 | 8.3 | 6.30 |
| 2012 | 117 | 7.7 | 1.0 | 7.00 |
| % change | -5 | -86 | -88 | +11 |
Ex-div: 13 Jun Payment: 13 Jul | ||||
