Continued strong demand for commercial space in the Midlands boosted the value of the property portfolio held by A&J Mucklow (MKLW) to £443.5m, a gain of £49.7m. That was well ahead of the previous year’s £13m uplift, and pushed adjusted net asset value up by almost a fifth to 559p per share.
Demand for space was such that no new assets were bought in the year to June 2018, as prices were driven higher. Instead, Mucklow elected to develop its existing assets. Rental income was little changed as a result of disposals, including the Bull Ring trading estate in Birmingham for £13m and Camp Hill for £7m, well ahead of book value but trimming rental income by £800,000.
However, there remains significant reversionary value within the portfolio. Rent reviews were secured at a 12.2 per cent premium to the previous annual rent, while new leases were concluded at a 3 per cent premium to estimated rental value. With demand cutting vacancy rates from 4.2 per cent to 2.8 per cent, Mucklow has submitted a planning application for a speculative (as yet unlet) 77,000 sq ft multi-let industrial scheme of seven units next to the pre-let unit at Tyseley. Assuming that demand continues, there is a further 440,000 sq ft of potential industrial/warehouse space for development within the portfolio.
| A&J MUCKLOW (MKLW) | ||||
| ORD PRICE: | 550p | MARKET VALUE: | £ 348m | |
| TOUCH: | 540-552p | 12-MONTH HIGH: | 574p | LOW: 471p |
| DIVIDEND YIELD: | 4.1% | TRADING PROPERTIES: | £5m | |
| DISCOUNT TO NAV: | 1% | |||
| INVESTMENT PROP: | £419m | NET DEBT: | 20% | |
| Year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 356 | 40.7 | 66.5 | 20.23 |
| 2015 | 424 | 56.2 | 89.0 | 20.84 |
| 2016 | 443 | 25.2 | 39.9 | 21.47 |
| 2017 | 469 | 29.6 | 46.6 | 22.12 |
| 2018 | 557 | 69.5 | 109.7 | 22.78* |
| % change | +19 | +135 | +135 | +3 |
| Ex-div: | 13 Sep | |||
| Payment: | 15 Oct | |||
| *Dividends paid quarterly Ex-div and pay date refer to third interim of 5.3p, with a final dividend of 7.3p payable on 15 Jan 2019 (Ex-div: 13 Dec) | ||||
