Higher rental income on reduced outgoings mean underlying pre-tax profit for regional property developer A&J Mucklow (MKLW) grew 15 per cent to £7.5m during the first half of the year. However, revaluations gains on the group's properties shrank to just £6.9m, compared with a hefty £42.5m at the same time the previous year, denting reported profit.
As quality buying opportunities have become scarcer and the regional property investment market more competitive, the group has decided to focus more of its attention on developing pre-lets, rather than buying investment properties. "Yields have got to such low levels, it's difficult to compete for the properties we want," says chairman Rupert Mucklow.
Yet the group's Midlands industrial portfolio continued to benefit from steady occupier demand, with vacancy rates falling to 4.7 per cent from 5.4 per cent the previous year. Net rental income also rose 12 per cent to £11m.
Broker Stifel is forecasting an adjusted net asset value per share of 465p for the full year, up from 427p in June 2015.
M&J MUCKLOW (MKLW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 490p | MARKET VALUE: | £310m | |
| TOUCH: | 480-490p | 12-MONTH HIGH: | 530p | LOW: 445p |
| DIVIDEND YIELD: | 2.4% | DEVELOPMENT PROPERTIES: | neg* | |
| PREMIUM TO NAV: | 12% | NET DEBT: | 26% | |
| INVESTMENT PROPERTIES: | £359m | |||
| Half-year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 424 | 27.4 | 43.3 | 9.31 |
| 2015 | 436 | 14.4 | 22.7 | 9.59 |
| % change | +3 | -47 | -47 | +3 |
Ex-div: 2 Jun Payment: 1 Jul *Excludes trading properties of £468,000 | ||||
