Helical’s (HLCL) efforts to streamline its portfolio of London and Manchester offices paid off for the commercial landlord in FY2019, generating a total property return 18 per cent ahead of 2018 at £81.4m. That was even after taking £13.7m in provisions against legacy assets and Carillion’s collapse at the Bower, as well as a £13.5m tax liability relating the sale of Shepherds Building.
The final three non-core assets were sold contributing to total disposal proceeds of £167m, 12 per cent ahead of March 2018 book value. That helped further reduce the portfolio loan-to-value ratio to 30.6 per cent, from 39.9 per cent, a level chief executive Gerald Kaye said management is “comfortable” with. It also meant net rents declined almost a third, but new lettings in London and Manchester were agreed at 3.2 per cent and 15.9 per cent ahead of March 2018 estimated rental values, respectively.
Derisking the development pipeline, including the full leasing of 1 Creechurch Place in East London and 70 per cent letting of the Bower, pushed up the portfolio’s valuation by 10.1 per cent, ahead of the 4.8 per cent return generated by the MSCI Central London Offices Total Return Index.
Analysts at Peel Hunt expect adjusted NAV of 505p a share at the March 2020 year-end, from 482p the same time the prior year.
| HELICAL (HLCL) | ||||
| ORD PRICE: | 358p | MARKET VALUE: | £ 427m | |
| TOUCH: | 356-361p | 12-MONTH HIGH: | 397p | LOW: 295p |
| DIVIDEND YIELD: | 2.8% | TRADING PROP: | £2.3m | |
| DISCOUNT TO NAV: | 25% | |||
| INVESTMENT PROP: | £803m* | NET DEBT: | 47% | |
| Year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 353 | 87.0 | 64.6 | 7.25 |
| 2016 | 425 | 114 | 91.3 | 8.17 |
| 2017 | 442 | 41.6 | 34.0 | 8.6 |
| 2018 | 450 | 30.8 | 22.3 | 9.5 |
| 2019 | 475 | 43.5 | 35.8 | 10.1 |
| % change | +6 | +41 | +61 | +6 |
| Ex-div: | 13 Jun | |||
| Payment: | 19 Jul | |||
| *Includes joint ventures | ||||
