Commercial developer U&I (UAI) was facing a rough 2020 financial year well before the pandemic hit. Following a weak first six months, the company said in November that it would need a strong second half to get close to its aim of £35m-£45m in trading and development gains.
That strong second half failed to materialise.
U&I finished the year ending 31 March with trading and development gains of just £11m, down almost three-quarters year-on-year, although this in in comparison to a 13-month year because of a change in reporting end dates. Deliveries were delayed by the market uncertainty from Brexit, the general election and then Covid-19.
The swing to a statutory pre-tax loss was down to investment portfolio revaluations thanks to retail exposure and £20.1m of provisions on its 399 Edgware Rd and Bromley projects.
Chief executive Matthew Weiner said the company’s focus on regeneration would see it through the Covid-19 downturn. Management has taken a pay cut, the workforce trimmed by 13 per cent – which the company says will not negatively impact project delivery – and development capital expenditure will be reduced by £33m this year. The final dividend has also been suspended.
While U&I is not reliant on rental income alone for earnings, the June quarter numbers paint a dire picture for this revenue stream. It only received 42 per cent of rent owed in the period, compared to 60 per cent in the March quarter and 98 per cent in the December quarter.
Broker Peel Hunt anticipates adjusted EPS of 2.3p for Feb 2021, up from a 7.6p loss in FY2020.
| U&I (UAI) | ||||
| ORD PRICE: | 79p | MARKET VALUE: | £ 99m | |
| TOUCH: | 76-82p | 12-MONTH HIGH: | 189p | LOW: 74p |
| DIVIDEND YIELD: | 3.0% | TRADING PROP: | £138m | |
| DISCOUNT TO NAV: | 66% | |||
| INVESTMENT PROP: | £203m † | NET DEBT: | 61%* | |
| Year to 28 Feb | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)** |
| 2016 | 291 | 25.8 | 17.5 | 5.9 |
| 2017 | 278 | -1.7 | -2.4 | 5.9 |
| 2018 | 303 | 48.2 | 32.2 | 5.9 |
| Year to 31 Mar | ||||
| 2019 (restated) ^ | 289 | 6.3 | 4.2 | 5.9 |
| 2020 | 232 | -58.6 | -44.5 | 2.4 |
| % change | -20 | - | - | -59 |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes lease liabilities of £42m. **Not including special dividends of 8p in 2015 and 2016, 2.8p in 2017, 12p in 2018 and 4.1p in 2019. ^13-months due to financial year change. † Includes investments in joint ventures and associates. | ||||
