A continued imbalance between supply and demand for big boxes and urban warehouses explains why Segro (SGRO) has 1.3m square metres of development projects under construction, almost three-quarters of which has already been pre-let.
All of this will be completed in 2019, and when fully let will generate £46m of rental income. Net rental income for the year to December 2018 rose by 12 per cent to £248m and, together with realised and unrealised valuation gains on the portfolio of £853m, this helped to lift adjusted net asset value (NAV) by 17 per cent to 650p a share.
Segro continued to recycle assets to generate funds for new developments, with £688m invested in developments, infrastructure and land part financed by £442m of disposals. Total spending for 2019 on infrastructure and land acquisitions is likely to exceed £600m, and to help finance this there will be a share placing to raise £450m. Even without this, finances are in good shape. A total of £423m of debt was secured during the year for Segro and its joint venture Segro European Logistics Partnership (SELP), and there is over £1.2bn of cash and available facilities at its disposal.
Analysts at Peel Hunt are forecasting adjusted NAV at the December 2019 year-end of 678p a share.
SEGRO (SGRO) | ||||
ORD PRICE: | 649p | MARKET VALUE: | £6.58bn | |
TOUCH: | 648.6-649p | 12-MONTH HIGH: | 682p | LOW: 551p |
DIVIDEND YIELD: | 2.9% | TRADING STOCK: | £51.7m | |
DISCOUNT TO NAV: | 0% | |||
INVESTMENT PROPERTIES: | £8.82bn | NET DEBT: | 33% |
Year to 31 Dec | Net asset value (p)* | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
2014 | 374 | 0.65 | 88.3 | 14.5 |
2015 | 449 | 0.69 | 88.0 | 15 |
2016 | 480 | 0.43 | 51.6 | 15.7 |
2017 | 557 | 0.98 | 98.5 | 16.6 |
2018 | 648 | 1.10 | 105.4 | 18.8 |
% change | +16 | +12 | +7 | +13 |
Ex-div | 21 Mar | |||
Payment: | 2 May | |||
*Previous figures adjusted for one-for-five rights issue in March 2017 |