LondonMetric Property (LMP) decided a few years ago to concentrate on providing warehouse facilities for retailers looking to accommodate the change in consumer buying habits. And the year to March 2016 saw this process continue, so that more than half the £1.5bn property portfolio now comprises retail distribution centres.
The move is timely as a steady increase in online non-food shopping emphasises the change from bricks to clicks and taps. Demand for space means that the portfolio has almost full occupancy, with half the contracted rental income subject to uplifts and only 6 per cent expiring in the next five years.
The fall in headline profits reflected a smaller valuation uplift, but crucially net rental income including acquisitions grew by 10 per cent to £77.7m. On top of this, there is 1.1m square feet of new construction on site worth £8.4m of annual rent, and another 1.1m sq ft in the pipeline representing £7.7m of new rent.
The regular dividend payout has been increased for the first time in five years, and is now covered by post-tax earnings. Visibility on income means that payments will now be made quarterly, starting with 1.8p a share in October, with the prospect of a higher payout later in the year.
Analysts at Peel Hunt are forecasting adjusted net asset value per share at March 2017 of 157p, from 148p a year earlier.
| LONDONMETRIC PROPERTY (LMP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 162.2p | MARKET VALUE: | £1.01bn | |
| TOUCH: | 162.1-162.3p | 12-MONTH HIGH: | 172p | LOW: 152p |
| DIVIDEND YIELD: | 4.5% | TRADING PROPERTIES: | nil | |
| PREMIUM TO NAV: | 13% | |||
| INVESTMENT PROPERTIES: | £1.47bn* | NET DEBT: | 66% | |
| Year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 116 | 5 | 0.5 | 7 |
| 2013 | 108 | -9 | -2.4 | 7 |
| 2014 | 121 | 127 | 20 | 7 |
| 2015 | 139 | 160 | 25.5 | 7** |
| 2016 | 144 | 83 | 13.3 | 7.25# |
| % change | +3 | -48 | -48 | +4 |
Ex-div:- Payment:- *Includes joint ventures **Not including special dividend of 2p No final dividend, second interim dividend of 3.75p paid on 5 April | ||||
