NAV, Interim Dividend and IMS

RNS Number : 9845J

Picton Property Income Limited

24 July 2013

 



24 July 2013

PICTON PROPERTY INCOME LIMITED

("Picton" or the "Company" or the "Group")

Net Asset Value as at 30 June 2013, Interim Dividend

and Interim Management Statement

Picton Property Income Limited (LSE: PCTN) announces its Net Asset Value for the quarter ended 30 June 2013 and Interim Dividend.

The highlights over the quarter include:-

Financial

·     Net Assets increased to £169.6 million (31 March 2013: £169.4 million)

·     NAV/EPRA NAV per share rose to 49.1 pence (31 March 2013: 49.0 pence)

·     Increase in underlying property portfolio valuation of 0.1% (31 March 2013: -1.5%)

·     Average debt maturity of 14.2 years, with a weighted average interest rate maintained at 4.5% per annum

Dividend

·     Dividend of 0.75 pence declared (31 March 2013: 0.75 pence)

·     Post-tax dividend cover over the quarter of 119% (31 March 2013: 141%)

·     Dividend yield of 6.3%, based on share price of 48 pence as at 22 July 2013

Leasing

·     Progress made on specific leasing initiatives with 15 lettings completed during the period contributing £0.76 million per annum

·     Key lettings achieved in Chancery Lane, WC2 and Floral Street, WC2

Asset Management

·     Two disposals of non-core assets for a total consideration of £0.4 million

·     Improvement in occupancy to 89% (March 2013: 88%)

Commenting, Nick Thompson, Chairman of Picton, said:

"We have seen an increase, albeit small, in Net Assets this quarter, with a relative improvement in valuation movements compared with March. This is a reflection of the leasing activity achieved in the period, in particular for our Central London assets. Equally, across the wider portfolio and market generally, we are starting to see some stability and improved confidence".

For further information:

Tavistock Communications

Jeremy Carey/James Verstringhe, 020 7920 3150, [e-mail]

Picton Capital Limited

Michael Morris, 020 7011 9978, [e-mail] 

David Sauvarin

The Company Secretary

Northern Trust International Fund Administration Services (Guernsey) Limited

Trafalgar Court

Les Banques

St Peter Port

Guernsey

GY1 3QL

Tel:     [phone]

Email: [e-mail]

Note to Editors

Picton Property Income Limited ('Picton') is an income focused, property investment company listed on the London and Channel Islands Stock Exchanges. It was established in 2005 to invest both directly and indirectly in commercial property across the United Kingdom.

With Net Assets of £169.6 million at 30 June 2013 and approximately 860 investors, the Company's objective is to provide shareholders with an attractive level of income, together with the potential for capital growth by investing in the principal commercial property sectors.  www.pictonproperty.co.uk

NET ASSET VALUE

The unaudited Net Asset Value ('NAV') of Picton, as at 30 June 2013, was £169.6 million, reflecting approximately 49.1 pence per share, an increase of 0.1% over the quarter. 

The NAV attributable to the ordinary shares is calculated under International Financial Reporting Standards and incorporates the external portfolio valuation as at 30 June 2013, including income for the quarter, but does not include a provision for the quarterly dividend announced herein, which will be paid in August 2013.

The property portfolio will next be subject to an independent valuation during September 2013 and the NAV per share, as at 30 September 2013, will be issued in October 2013.

A detailed breakdown of the NAV is included within the Appendix.

DIVIDEND

An interim dividend of 0.75 pence per share is declared in respect of the period 1 April 2013 to 30 June 2013 (1 January 2013 to 31 March 2013: 0.75 pence).

The dividend will be paid on 30 August 2013 to shareholders on the register on 16 August 2013. The ex-dividend date will be 14 August 2013.

DEBT

The Company has a weighted average interest rate of 4.5%, of which 99% is fixed with a weighted average debt maturity profile of approximately 14.2 years.

As at 30 June 2013, net gearing, calculated as total debt including ZDPs less cash, as a proportion of gross property value, was 54.1% (March 2013: 54.5%). 

MARKET BACKGROUND

According to the IPD Monthly Index, signs of a gradually improving market are starting to show. Total returns in the three months to June 2013 were 1.9% (March 2013: 1.1%). The income return was 1.7%, and capital growth was 0.2%, its first three month rise since November 2011.

Across the principal IPD sectors office values rose by 0.8% (March 2013: -0.3%) and industrial 0.4% (March 2013: -0.4%), only retail recorded a negative movement of -0.3% (March 2013: -0.9%). Of the 37 IPD segments, on a rolling 3 month basis, 16 recorded positive movements in June, compared to only four in March.

The occupancy rate on the index was 89.0% in June up from 88.7% in March 2013.

PORTFOLIO UPDATE

Over the quarter we have completed 15 lettings adding £765,375 per annum to the rent roll after incentives, and renewed three leases with a combined rent of £148,788 per annum. Three rent reviews were completed, one at a nil increase and the other two 3.6% above ERV.

Overall, the transactions were in line with our ERV. In addition, terms were agreed on a further 15 vacant properties with a combined annual rent of £518,000 per annum. These transactions are in solicitor's hands and we would expect to conclude these lettings during the current quarter.

Two units came back during the quarter; in Carlisle an occupier actioned a break option, and a further restaurant property became vacant at Regency Wharf in Birmingham when the occupier went into administration.

A selection of activity over the quarter included:

Offices

·      Completed the letting of the 4th and 5th floors at 1 Chancery Lane to Clarke Willmott LLP and Cripps Sears & Partners for a combined rent of £232,630 per annum. The property is now fully let.

·      Let the 2nd floor of Stanford House in Covent Garden to Fivium Ltd at £170,500 per annum, 7.3% above ERV.

·      Instructed the phase one refurbishment of 2/4 Addiscombe Road in Croydon, which will be ready for occupation by the end of 2013.

Industrial

·      Completed the letting of units 4 and 7 at Datapoint, London E16 to Arriva Transport Solutions Ltd and Altitec Ltd at a combined rent of £113,600 per annum. We have one further unit to let on the estate.

·      Let the final vacant unit at Dencora Way in Luton to Valmy SAS Ltd for £32,000 per annum.

·      Let two units at Easter Court in Warrington to Wild About Water (UK) Ltd and Eden Springs UK Ltd at a combined rent of £56,620 per annum, leaving one further unit on the estate to let.

·      Relocated an occupier at Middleton Trade Park to facilitate the letting of four units to Screwfix Direct Ltd at a rent of £38,025 per annum. The estate is now fully let.

·      Sold the final unit at Winston Business Park in Lancing for £49,000; 6.5% above the preceding valuation.

Retail

·      We have applied for retail use on the ground floor of our property in Southampton following a regear with the office occupier on the upper floors.

·      3 Lower Borough Walls in Bath was sold for £355,000; 1.5% above the preceding valuation.

The occupancy rate rose to 89% as a result of the leasing activity across the portfolio (March 2013: 88%).

As at 30 June 2013, the portfolio had a net initial yield of 6.9% and a net reversionary yield of 8.2%. The weighted average unexpired term (to first termination) was 6.8 years.

Appendix

NET ASSETS SUMMARY

The unaudited NAV is as follows:

	30 June 2013 £million	31 March 2013 £million	31 Dec 2012 £million
Investment properties *	382.3	382.7	388.9
Other assets	12.3	12.3	12.3
Cash	24.7	22.9	22.3
Other liabilities	(16.1)	(15.1)	(15.8)
Borrowings: Loan facilities                     Loan stock                     ZDP's	(208.4) (2.1) (23.1)	(208.6) (2.1) (22.7)	(208.8) (2.1) (22.3)
Net Assets	169.6	169.4	174.5
Net Asset Value per share	49.1p	49.0p	50.5p

* The underlying property valuation is stated net of lease incentives.

The movements in Net Asset Value can be summarised as follows;

	Total	Movement	Per share
	£million	%	Pence
NAV at 31 March 2013	169.4		49.0
Movement in property values	(0.3)	(0.2)	(0.1)
Net income after tax for the period	3.1	1.8	0.9
Dividends paid	(2.6)	(1.5)	(0.7)
NAV at 30 June 2013	169.6	0.1	49.1

PORTFOLIO COMPOSITION

The Company's current portfolio is structured as follows:-

Sector	Weighting 30 June 2013	Like for Like Valuation Change
Industrial	35.7%	1.2%
Retail	19.0%	0.1%
Offices - Central/Greater London	18.8%	3.1%
Offices - Rest of UK	15.1%	-4.0%
Retail Warehouse	6.8%	-3.4%
Leisure	4.6%	-1.4%
Total	100%	0.1%

GEOGRAPHICAL WEIGHTINGS

Geography	Weighting 30 June 2013
Central & Greater London	27.4%
South East	29.2%
South West	3.3%
Midlands	16.7%
North	15.4%
Scotland	2.0%
Wales	5.5%
Northern Ireland	0.5%
Total	100%

TOP TEN ASSETS

Asset	Weighting 30 June 2013
River Way Industrial Estate, Harlow	7.7%
Unit 5320 Magna Park, Lutterworth	7.6%
Stanford House, Long Acre, WC2	6.1%
50 Farringdon Road, EC1	4.5%
Phase II Parc Tawe, Swansea	4.3%
Angel Gate Office Village, City Road, EC1	4.1%
Boundary House, Jewry Street, EC3	4.0%
1 Chancery Lane, WC2	3.0%
Colchester Business Park, Colchester	2.9%
250 Birtley Road, Tyne & Wear	2.6%
Total	46.8%

 

END

 

 

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