The key numbers are moving in the right direction for London-fringe office landlord Workspace. Excluding properties under refurbishment or redevelopment, occupancy rose from 86.1 per cent to 87.8 per cent over the year, while the average rent closed 3 per cent higher at £12.61 per sq ft.
Together, these improvements drove a 4 per cent increase in net rental income. Alongside lower finance costs, that boosted post-interest trading profits by 13 per cent. Debt-interest payments were £3m lower mainly thanks to a well-timed rights issue last summer, which reduced gearing but spread profits over a wider shareholder base - so that adjusted earnings per share actually fell. But the dividend remains adequately covered at 1.3 times trading profit.
Adjusted net assets per share rose, despite the rights issue. That's largely thanks to an impressive 5.1 per cent valuation surplus over the year - including a 3 per cent gain in the second half, even as commercial property valuations across most of the country slid. The higher rent roll is responsible for two-thirds of the valuation boost, said new chief executive Jamie Hopkins, with the balance created by development and refurbishment projects.
Broker Espirito Santo expects adjusted net asset value to rise to 333p by next March.
WORKSPACE (WKP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 225p | MARKET VALUE: | £323m | |
| TOUCH: | 224-225p | 12-MONTH HIGH: | 295p | LOW: 210p |
| DIVIDEND YIELD: | 3.9% | TRADING PROPERTIES: | nil | |
| DISCOUNT TO NAV: | 27% | |||
| INVESTMENT PROPERTIES: | £759m | NET DEBT: | 71% | |
| Year to 31 Mar | Net asset value (p)*# | Pre-tax profit (£bn) | Earnings per share (p)* | Dividend per share (p)* |
|---|---|---|---|---|
| 2008 | 2,243 | -37.0 | -146 | 33.0 |
| 2009 | 260 | -360 | -1,296 | 7.22 |
| 2010 | 257 | 26.0 | 22.1 | 7.22 |
| 2011 | 286 | 52.8 | 45.4 | 7.99 |
| 2012 | 308 | 48.5 | 36.3 | 8.79 |
| % change | +8 | -8 | -20 | +10 |
Ex-div: 11 Jul Payment: 3 Aug *Per share figures adjusted for rights issues in 2009 and 2011 and a share consolidation in 2011 #Adjusted NAV | ||||
