Palace Capital (PCA) attracted some criticism over the dilutive effect of a £65.7m share placing to fund the cost of acquiring property investment group RT Warren. Even so, over the past four years the group’s adjusted net asset value has more than doubled to 451p a share, although that was at the September half-year, and will be lower after factoring in the placing.
Developments included securing planning consent at Hudson House in York to redevelop the site into 127 flats, 5,000 sq ft of retail space and a 34,000 sq ft office block. With demolition pencilled in to start in February 2018, this will save around £500,000 in rates and service charges.
Disposals generated £3.29m with the sale of a vacant industrial property in Exeter at a premium to book value, while Whittle House in Coventry was sold at book value.
The RT Warren acquisition brings in 21 commercial assets and 65 residential properties, and the previously vacant London Court in Southampton has already been let on a 10-year lease. Annualised contracted rental income rose by 11 per cent to £14.1m.
Analysts at Arden Partners are forecasting adjusted net asset value at the March 2018 year-end of 395p a share, from 443p in 2017.
| PALACE CAPITAL (PCA) | ||||
| ORD PRICE: | 340p | MARKET VALUE: | £156m | |
| TOUCH: | 335-345p | 12-MONTH HIGH: | 391p | LOW: 330p |
| DIVIDEND YIELD: | 5.6% | DEVELOPMENT PROP: | nil | |
| DISCOUNT TO NAV: | 23% | |||
| INVESTMENT PROP: | £203m | NET DEBT: | 75% | |
| Half-year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 419 | 3.9 | 13.4 | 9.0 |
| 2017 | 442 | 4.9 | 17.3 | 9.5 |
| % change | +5 | +24 | +29 | +6 |
| Ex-div: | 07 Dec | |||
| Payment: | 29 Dec |
