Segro (SGRO) is pushing ahead with expanding its portfolio, ploughing over £600m into acquisitions, development projects and purchasing land during the first half. Around two-thirds of the land acquired will be used to create two major flagship UK logistics parks in Coventry and Northampton, which will be developed mainly on a pre-let basis.
That is in addition to projects already under construction, which the group estimates will generate £45m of potential annual rent, of which 85 per cent has been secured through pre-lets. However, the group was not completely immune from the impact of insolvencies, with space equating to £8.2m in rent handed back, almost double the same time last year. "We are pretty confident that we'll be able to re-let that at a higher level than previously," said chief financial officer Soumen Das.
Management has good reason for optimism. Like-for-like rental income rose 2 per cent as it managed to secure rents upon review and renewal at an average 10 per cent ahead of previous passing rents. Meanwhile, second and third rent collection rates stood at 99 per cent and 95 per cent, respectively.
Panmure Gordon forecasts adjusted net assets of 713p a share at the end of December, rising to 742p the same time the following year.
| SEGRO (SGRO) | ||||
| ORD PRICE: | 993p | MARKET VALUE: | £11.8bn | |
| TOUCH: | 992.6-993.4p | 12-MONTH HIGH: | 933p | LOW: 642p |
| DIVIDEND YIELD: | 2.1% | TRADING PROPERTIES: | £29.2m | |
| PREMIUM TO NAV: | 38% | NET DEBT: | 21% | |
| INVESTMENT PROPERTIES: | £10.4bn* | |||
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 668 | 411 | 37.1 | 6.3 |
| 2020 | 717 | 221 | 19.5 | 6.9 |
| % change | +7 | -46 | -47 | +10 |
| Ex-div: | 13 Aug | |||
| Payment: | 24 Sep | |||
| *Includes investments in joint ventures | ||||
