Headline profits were down at the interim stage for Leeds-based real estate group Town Centre Securities (TOWN), but only because the £7.6m valuation uplift on its portfolio was less than the £10.1m recorded a year earlier. In fact, rental income from investment properties rose from £7.9m to £8.2m, while recent acquisitions helped to boost income from the portfolio of car parks by two-thirds to £5m.
The jewel in the property portfolio remains the Merrion Centre in Leeds, which the group has been busy refurbishing and installing more upmarket tenants. Specifically, the rather run-down Merrion Hotel is getting a comprehensive makeover - it will become a 134-room Ibis Styles hotel and include a 4,000 sq ft Marco Pierre White restaurant. These are ideally situated opposite the 13,000-seat Leeds First Direct Arena. Completion is expected in the first half of next year.
The redevelopment of Merrion House will involve complete refurbishment of 120,000 sq ft of existing office space and the creation of a further 50,000 sq ft. Part funded by Leeds City Council, completion is expected in the first quarter of 2018, and the two projects will add a combined £1.9m to annual rental income.
Capital recycling continues, with two disposals raising £13.3m, and a further £20m of assets earmarked for sale over the next 12 months.
Subject to revision, analysts at Liberum are forecasting June 2016 adjusted net asset value (NAV) of 364.4p (from 344.6p in 2015).
| TOWN CENTRE SECURITIES (TCSC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 320.25p | MARKET VALUE: | £170m | |
| TOUCH: | 320.25-334.75p | 12-MONTH HIGH: | 337p | LOW: 272p |
| DIVIDEND YIELD: | 3.3% | TRADING PROPERTIES: | £6.7m | |
| DISCOUNT TO NAV: | 16% | NET DEBT: | 95% | |
| INVESTMENT PROPERTIES: | £369m* | |||
| Half-year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 326 | 13.3 | 25.0 | 3.1 |
| 2015 | 359 | 11.6 | 21.9 | 3.1 |
| % change | +10 | -13 | -12 | - |
Ex-div: 26 May Payment: 24 Jun *Includes joint ventures | ||||
