This financial year, the main goal of real estate developer U+I (UAI) is to book between £65m and £70m of development and trading gains. You might view it as a positive, then, to hear management reassurance that all is on track. Or would you? So far, just £9.4m of those gains have been delivered, with just £2.2m coming since the end of August. On the surface, that sets the stage for a very busy run-in, and probably explained the small sell-off in shares on the publication of U+I’s half-year results.
Yet the group has good visibility on the pipeline, backed by chief financial officer Marcus Shepherd’s assertion that “while most of the completions are in the second half, the majority of the work has already taken place”. Almost all of the 12 Hammersmith Grove development is let or under offer, which should contribute between £9m and £11m of the pile, with up to £18m set to come from the combined sales of a wind farm project and a student accommodation site in Brighton.
Broker Peel Hunt expects adjusted net asset value (NAV) to climb to 302p by February, up from 277p at the end of the 2017 financial year.
| U+I (UAI) | ||||
| ORD PRICE: | 184p | MARKET VALUE: | £230m | |
| TOUCH: | 184-186p | 12-MONTH HIGH | 205p | LOW: 147p |
| DIVIDEND YIELD: | 3.2%* | TRADING STOCK: | £248m | |
| DISCOUNT TO NAV: | 32% | NET DEBT: | 47% | |
| INVESTMENT PROPERTIES: | £235m** | |||
| Half-year to 31 Aug | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 272 | -11.7 | -9.9 | 2.4 |
| 2017 | 269 | -3.3 | -3.2 | 2.4 |
| % change | -1 | - | - | - |
| Ex-div: | 26 Oct | |||
| Payment: | 24 Nov | |||
*Not including special dividend of 2.8p, paid 16 Jun 2017 **Including joint ventures and associations | ||||
