It was a mixed half for Segro, Britain's biggest industrial landlord. Its operating performance was solid, with like-for-like net rental income up 1 per cent and the vacancy rate maintained at 9.1 per cent. But the portfolio is still being written down in value - by £151m over the latest six-month period. That cut adjusted net asset value (NAV) by 6.7 per cent to 317p and blighted the reported profit numbers.
Segro, which has long been dogged by underperformance, announced a turnaround plan last November that involved splitting its sprawling portfolio into a higher-quality 'core' component and about £1.4bn of peripheral assets ripe for disposal. It has already managed to sell £503m of these - more than initially hoped - including £111m-worth of industrial estates in places such as Portsmouth, Bristol and Crawley; the sale of which was announced alongside these results.
The disposal proceeds have been used to pay down debt - although reducing Segro's high loan-to-value ratio is proving a slow grind against the backdrop of falling valuations - and to buy £195m of logistics warehouses near European hub cities.
Following downgrades, broker Peel Hunt expects year-end adjusted NAV of 307p.
SEGRO (SGRO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 240p | MARKET VALUE: | £1,781m | |
| TOUCH: | 239-240p | 12-MONTH HIGH: | 305p | LOW: 194p |
| DIVIDEND YIELD: | 6.2% | TRADING PROPERTIES: | £241m | |
| DISCOUNT TO NAV: | 25% | |||
| INVESTMENT PROPERTIES: | £3.84bn | NET DEBT: | 85% | |
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 367 | 64.6 | 8.6 | 4.9 |
| 2012 | 322 | -81.8 | -10.8 | 4.9 |
| % change | -12 | - | - | - |
Ex-div: 5 Sep Payment: 5 Oct | ||||
