After a long and complex restructuring, property investment trust Redefine International (RDI) is back in growth mode. Its portfolio was marked up around 5 per cent over the six months, with a stellar run from Australian real estate company Cromwell offsetting a 6.1 per cent fall in the value of its UK regional offices. Adjust for the £128m capital-raising in October, and various balance-sheet quirks, and net asset value (NAV) rose from 36p in August to 40p in February.
The company has now taken advantage of the buoyancy of Australian property stocks to reduce its stake in Cromwell, raising £52.8m. Chief operating officer Stephen Oakenfull says the capital will probably fund two retail property acquisitions currently undergoing due diligence, one in the UK and one in Germany. Redefine is more bullish on shops than on the regional offices it inherited from its audacious - some might say foolhardy - acquisition of Wichford in 2011.
Redefine's basic NAV, reported below, is much lower than its adjusted NAV for two reasons. First, its stake in Cromwell is valued on the basis of its book value rather than its stock market value, which is substantially higher. Second, the basic figure includes the negative equity from two ex-Wichford portfolios that are currently being wound up, even though the losses will be borne by the lenders rather than Redefine.
Broker Investec expects year-end adjusted NAV of 41p and a dividend of 3p.
REDEFINE INTERNATIONAL (RDI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 36p | MARKET VALUE: | £347m | |
| TOUCH: | 35.8-36p | 12-MONTH HIGH: | 37.3p | LOW: 25.5p |
| DIVIDEND YIELD: | 10.5% | TRADING PROP: | £60.3m | |
| PREMIUM TO NAV: | 35% | |||
| INVESTMENT PROP: | £487m | NET DEBT: | 138% | |
| Half-year to 28 Feb | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012* | 24.1 | -61.4 | -11.9 | 2.10 |
| 2013 | 26.7 | 18.1 | 1.91 | 1.48 |
| % change | +11 | - | - | -30 |
Ex-div: 8 May Payment: 24 May *Restated to reflect share consolidation of 0.9:1 in October 2012 | ||||
