Concentrated as it is on regional growth areas such as Leeds and Manchester, commercial landlord Town Centre Securities (TOWN) spent the first half of its financial year progressing development projects and recycling cash to fund them through disposals.
Sales in the first half amounted to £7.7m, taking sales in the last 12 months to over £25m, all at or above previous valuations. Completed developments included the flagship Merrion House development, which ends a 10-year £70m programme on the Merrion Centre.
Crucially, the combination of two new hotels in Leeds and an increase in Merrion House rents will be more than enough to offset £1.5m income lost on disposals. However, in the six months to December, adjusted earnings per share eased from 8p to 7.6p a share, although headline profits were boosted by a £6.4m valuation gain compared with a £2.7m devaluation a year earlier.
The group is also working on a 91-unit residential development in Manchester’s Piccadilly Basin, and has also been selected by Leeds City Council to develop a major scheme in George Street for residential and retail use.
Prior to any adjustments for the half-year figures, analysts at Liberum were forecasting adjusted net asset value per share at the June 2018 of 368.1p a share, from 359.4p a year earlier.
| TOWN CENTRE SECURITIES (TOWN) | ||||
| ORD PRICE: | 288p | MARKET VALUE: | £153m | |
| TOUCH: | 278-282p | 12M HIGH: | 319p | LOW: 266p |
| DIVIDEND YIELD: | 4% | DEVELOPMENT PROP: | nil | |
| DISCOUNT TO NAV: | 23% | |||
| INVESTMENT PROP: | £388m* | NET DEBT: | 91% | |
| Half-year to 31 Dec | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 355 | 2.6 | 4.9 | 3.25 |
| 2017 | 375 | 12.4 | 23.4 | 3.25 |
| % change | +6 | +379 | +378 | - |
| Ex-div: | 24 May | |||
| Payment: | 22 Jun | |||
| *Includes joint ventures | ||||
