Regional landlord Town Centre Securities (TOWN) continued to deliver strong rental growth in the year to June 2018 through a combination of new leisure units becoming available for rent and repositioning the property portfolio. This included further reducing its exposure to the leisure and retail sector, which has been cut to 55 per cent of the portfolio, from 70 per cent two years ago.
Seven properties have now been disposed of in the past two years, at a 6 per cent premium to book value and raising £32m. Some of the proceeds have been used to buy three properties in Leeds, Chiswick and Glasgow. Headline profits were boosted by a £9.8m property revaluation surplus compared with a £1.1m devaluation in the previous year, while adjusted earnings per share were marginally lower because of disposals, but there is a current development pipeline that on completion will have a gross development value of £588m.
The Merrion Centre in Leeds remains the group’s largest single asset, with traditional mall retail income now reduced to just a quarter of the total. Footfall and rental income remained strong, with like-for-like rental income up 2 per cent. In Manchester, the Burlington House residential development for private rent is expected to complete in May 2019.
Subject to revision, house broker Liberum was forecasting adjusted net asset value (NAV) at the June 2019 year-end of 399.9p, up from 384p in 2018.
| TOWN CENTRE SECURITIES (TOWN) | ||||
| ORD PRICE: | 260p | MARKET VALUE: | £138m | |
| TOUCH: | 258-264p | 12-MONTH HIGH: | 319p | LOW: 252p |
| DIVIDEND YIELD: | 4.5% | TRADING PROPERTIES: | nil | |
| DISCOUNT TO NAV: | 32% | |||
| INVESTMENT PROP: | £376m* | NET DEBT: | 94% | |
| Year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 308 | 27.4 | 51.6 | 10.44 |
| 2015 | 344 | 24.0 | 45.1 | 10.44 |
| 2016 | 357 | 11.9 | 22.4 | 11 |
| 2017 | 359 | 6.7 | 12.7 | 11.5 |
| 2018 | 384 | 18.4 | 34.6 | 11.75 |
| % change | +7 | +173 | +172 | +2 |
| Ex-div: | 06 Dec | |||
| Payment: | 14 Jan | |||
| *Includes joint ventures | ||||
