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Picton Prop Inc Ltd (PCTN)


Wednesday 25 July, 2018

Picton Prop Inc Ltd

Net Asset Value

25 July 2018 

(“Picton”, the “Company” or the “Group”)
LEI: 213800RYE59K9CKR4497

Net Asset Value as at 30 June 2018

Picton (LSE: PCTN), the property investment company, announces its Net Asset Value for the quarter ended 30 June 2018.

Highlights during the quarter included:

Improved Balance Sheet and early debt repayment

  • Net Assets increased to £494.6 million (31 March 2018: £487.4 million).
  • NAV/EPRA NAV per share rose 1.5% to 91.8 pence (31 March 2018: 90.4 pence).
  • Total return for the quarter of 2.5% (31 March 2018: 3.1%).
  • Post quarter end completed the early repayment of £33.7 million of debt due to mature in July 2022.
  • As a result of the early repayment a proforma 30 June NAV would be 91.1 pence per share.

Dividend declared with strong cover

  • Dividend of 0.875 pence per share declared and to be paid on 31 August 2018 (31 March 2018: 0.875 pence per share).
  • Annual dividend equivalent to 3.5 pence per share, delivering a dividend yield of 3.9%, based on 23 July 2018 share price.
  • Dividend cover for the quarter of 121% (31 March 2018: 128%).

Further valuation gains

  • Like-for-like increase in property portfolio valuation for the quarter of 0.8% (31 March 2018: 1.4%).
  • Completed the disposal of two office assets for a combined sale price of £11.8 million, 8.4% ahead of the March valuation.
  • Completed seven lettings, six lease renewals / regears and two rent reviews, on average 6.2% ahead of the March ERV, with a combined annual rent of £0.9 million.
  • Occupancy of 95%, reflecting ongoing active management (31 March 2018: 96%).

REIT conversion

  • Shareholder approval obtained on 23 July 2018 for REIT conversion, 99.97% of votes cast in favour.
  • Intention to enter the REIT regime on 1 October 2018.

Nick Thompson, Chairman of Picton, commented: 

“We have made considerable progress implementing several initiatives over the quarter which have resulted in an increase in net assets, strong dividend cover and improvements to the balance sheet, which culminated in a debt repayment post quarter end.”

Michael Morris, Chief Executive of Picton Capital, said:

“The portfolio continues to perform well with the industrial assets driving performance overall. Looking ahead, we believe Picton is well positioned with high occupancy and the ability to generate greater efficiencies later in the year on conversion to a REIT.”

This announcement contains inside information.

For further information:

Jeremy Carey/James Verstringhe, 020 7920 3150, [email protected]

Picton Capital Limited
Michael Morris, 020 7011 9980, [email protected] 

The Company Secretary Northern Trust International Fund Administration Services (Guernsey) Limited
Trafalgar Court
Les Banques
St Peter Port

Andy Le Page, 01481 745 001, [email protected]

Note to Editors

Picton is a property investment company established in 2005.  It owns and actively manages a £678 million diversified UK commercial portfolio, invested across 49 assets and with around 360 occupiers (as at 30 June 2018). Through an occupier focused, opportunity led approach to asset management, Picton aims to be one of the consistently best performing diversified UK focused property companies listed on the main market of the London Stock Exchange.

For more information please visit: 


The unaudited Net Asset Value (‘NAV’) of Picton, as at 30 June 2018, was £494.6 million, reflecting 91.8 pence per share, an increase of 1.5% over the quarter. The proforma June NAV of 91.1 pence includes the impact of the debt repayment that completed post quarter end.

30 June 2018
30 June 2018
31 March 2018
31 Dec 2017
Investment properties* 669.4 669.4 674.5 665.3
Other assets 16.3 16.6 17.9 18.1
Cash 21.6 44.0 31.5 31.7
Other liabilities (21.6) (21.6) (22.5) (21.4)
Borrowings (194.6) (213.8) (214.0) (216.3)
Net Assets 491.1 494.6 487.4 477.4
Net Asset Value per share 91.1 91.8 90.4p 88.6p

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

The NAV attributable to the ordinary shares is calculated under IFRS and incorporates the independent market valuation as at 30 June 2018, including income for the quarter, but does not include a provision for the dividend this quarter, which will be paid in August 2018.

The movement in Net Asset Value can be summarised as follows:

Per share
NAV at 31 March 2018 487.4 90.4
Movement in property values 6.0 1.3 1.2
Net income after tax for the period 5.7 1.2 1.1
Dividends paid (4.7) (1.0) (0.9)
Other 0.2 - -
NAV at 30 June 2018 494.6 1.5 91.8
Proforma NAV at 30 June 2018 491.1 0.8 91.1


A separate announcement has been released today (25 July 2018) declaring a dividend of 0.875 pence per share in respect of the period 1 April 2018 to 30 June 2018 (1 January 2018 to 31 March 2018: 0.875 pence). 

Post-tax dividend cover over the quarter was 121% (31 March 2018: 128%). 


Total borrowings at 30 June 2018 were £213.8 million.

Post quarter end, the Company completed an early repayment of £33.7 million of debt, reducing the total debt outstanding to £194.6 million. The repayment was funded using £23 million of existing cash resources, with the balance from one of the Group’s Revolving Credit Facilities (RCFs). 87% of the drawn debt is now fixed under long term facilities, with the remainder at variable rates. Following the repayment the net gearing ratio, calculated as total debt less cash, as a proportion of gross property value, is 25.5% (31 March 2018: 26.7%). 

The debt repayment is expected to reduce finance costs by £1 million per annum in the short term with Picton incurring a one-off repayment fee of £3.2 million which will be reflected in the September NAV. Picton has also secured a number of other amendments to the loan documentation which will increase operational flexibility. This repayment has increased the weighted average debt maturity profile of the Group to approximately 10.6 years and reduced the weighted average interest rate to 4.0%.

After the debt repayment the Company has a further £26 million available from its undrawn RCFs. 


The portfolio valuation increased by 0.8% or £5.4 million, with the industrial sector delivering the strongest growth. The office sector valuation remained relatively flat and the retail and leisure sector valuation declined over the quarter as detailed below. The performance over the quarter can primarily be attributed to the industrial sector, where we have achieved further rental growth through activity on several estates and in the regional office sector where occupier demand remains strong. Conversely, London Offices and the regional high street retail portfolio saw values decline, reflecting a weaker rental market outlook.

The sector weightings at 30 June 2018 and valuation movements over the quarter are shown below:

Sector Portfolio
Like for like
Valuation change
Industrial 43.0% 3.4%
South East 30.0%
Rest of UK 13.0%
Offices 34.5% -0.1%
London City and West End 4.1%
Inner and Outer London 8.3%
South East 11.0%
Rest of UK 11.1%
Retail and Leisure 22.5% -2.5%
Retail warehouse 9.0%
High Street – Rest of UK 5.9%
High Street – South East 5.7%
Leisure 1.9%
Total 100% 0.8%

As at 30 June 2018, the portfolio had a net initial yield of 5.4% (allowing for void holding costs) or 5.5% (based on contracted net income) and a net reversionary yield of 6.4%. The weighted average unexpired lease term, based on headline rent, was 5.2 years. 

Occupancy reduced slightly to 95%.

 The top ten assets, which represent 50% of the portfolio by capital value, are detailed below.

Asset Sector Location
Parkbury Industrial Estate, Radlett Industrial South East
River Way Industrial Estate, Harlow Industrial South East
Stanford House, Long Acre, WC2 Retail London
Angel Gate, City Road, EC1 Office London
50 Farringdon Road, EC1 Office London
Tower Wharf, Cheese Lane, Bristol Office South West
Belkin Unit, Shipton Way, Rushden, Northants Industrial East Midlands
30 & 50 Pembroke Court, Chatham Office South East
Colchester Business Park, Colchester Office South East
Lyon Business Park, Barking Industrial Outer London

Key highlights in the quarter included:


We let three units at Easter Court in Warrington, Lyon Business Park, Barking and Nonsuch Industrial Estate in Epsom, securing £0.1 million per annum, 2% ahead of the March ERV.

We renewed three leases at Dencora Way, Luton securing £0.2 million per annum, in line with the March ERV and one lease was renewed in Warrington also in line with ERV. Both estates remain fully let.

Two leases were surrendered at Lyon Business Park, Barking and Parkbury Industrial Estate in Radlett to facilitate active management. We expect to re-let both units significantly ahead of the previous passing rent.


We let the final suite at 50 Farringdon Road, London to an existing occupier, generating income of £0.21 million per annum. At the same time we varied their existing lease securing five year income on the entire first floor. This transaction was a good example of our ‘right sizing’ promise in action and the building is now fully leased.

We sold 800 Pavilion Drive, Northampton, a detached office building, let to Ricoh UK Limited on a lease expiring in June 2023, at a 13% uplift to the independent March 2018 valuation. The sale price of £7.95 million reflects a net initial yield of 7.5% and the shorter-term nature of the income profile.

The sale of Merchants House, Chester, also completed for £3.85 million, with a further £0.15 million top up payment due on or before 2023.

Retail and Leisure

Despite high occupancy, the retail and leisure portfolio has decreased in value, primarily due to tougher trading conditions in the sector, the adverse impact of CVAs in the wider market and a downward adjustment to rental values where appropriate.


According to the MSCI IPD Monthly Index, the All Property total return was 2.2% for the quarter to June 2018, compared to 2.3% for the previous quarter. 

Capital growth was 0.9% (March 2018: 1.0%) and rental growth was 0.2% for the quarter (March 2018: 0.4%). A more detailed breakdown is shown below:

IPD rental growth

Number of IPD segments
Quarterly growth Positive growth Negative growth
Industrial 1.2% 7 -
Office 0.3% 9 1
Retail -0.5% 3 17
All Property 0.2% 19 18

IPD capital value growth

Number of IPD segments
Quarterly growth Positive growth Negative growth
Industrial 3.9% 7 -
Office 0.5% 10 -
Retail -1.0% 3 17
All Property 0.9% 20 17

*Source: MSCI IPD Monthly Digest, June 2018


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