Net Asset Value • Oct 22, 2013
Net Asset Value
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RNS Number : 0242R
Picton Property Income Limited
22 October 2013
22 October 2013
PICTON PROPERTY INCOME LIMITED
("Picton" or the "Company" or the "Group")
Net Asset Value as at 30 September 2013
and Interim Dividend
Picton (LSE: PCTN) announces its Net Asset Value for the quarter ended 30 September 2013 and Interim Dividend.
The highlights over the quarter include:-
Financial
· Net Assets increased to £180.3 million (30 June 2013: £169.6 million).
· NAV/EPRA NAV per share rose 2.7% to 50.4 pence (30 June 2013: 49.1 pence).
· Increase in underlying property portfolio valuation of 1.4% (30 June 2013: 0.1%).
· Average debt maturity of 13.9 years, with a fixed weighted average interest rate maintained at 4.5% per annum.
· Raised £6.3 million through the issue of 12.3 million shares on 5 September 2013 at 51.5 pence, a 4.9% premium to June NAV.
Dividend
· Dividend of 0.75 pence declared (30 June 2013: 0.75 pence).
· Post-tax dividend cover over the quarter of 126% (30 June 2013: 119%).
· Dividend yield of 5.9%, based on share price of 51.25 pence as at 30 September 2013.
Portfolio Activity
· Improvement in occupancy to 90% (June 2013: 89% / March 2013: 88%).
· Purchase of Greater London multi-let industrial estate Lyon Business Park, Barking for £9.48 million increasing the Company's exposure to the London market to 29.8% of the total portfolio.
· Further progress made on specific leasing initiatives with 12 lettings completed during the period contributing £0.48 million per annum.
· Key lettings achieved in Stanford House, WC2 (fully let), Atlas House, Marlow (fully let) and Heron Industrial Estate, Reading (fully let).
Post Quarter Portfolio Activity
· Secured residential planning permission for upper levels of Stanford House, London WC2
· Acquired a further unit for £0.98 million at Angel Gate, London EC1.
· Strong pipeline of over £0.75 million per annum of leasing transactions under offer.
Commenting, Nick Thompson, Chairman of Picton said:
"Our dividend cover and gearing have contributed to strong NAV growth this quarter. In addition we have taken advantage of Picton's recent share price performance to raise equity at a premium to NAV and invested this effectively into income producing assets with active management potential."
Michael Morris, Chief Executive of Picton Capital said:
"This has been a very active quarter during which we have improved occupancy and created a strong pipeline of occupational transactions. As such we have been able to focus on both income and value enhancement opportunities across sectors."
For further information:
Tavistock Communications
Jeremy Carey/James Verstringhe, 020 7920 3150, [email protected]
Picton Capital Limited
Michael Morris, 020 7011 9978, [email protected]
David Sauvarin
The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3QL
Tel: 01481 745001
Email: [email protected]
Note to Editors
Picton Property Income Limited ('Picton') is an income focused, property investment company listed on the London and Channel Islands Stock Exchanges. Picton can invest both directly and indirectly in commercial property across the United Kingdom.
With Net Assets of £180.3 million at 30 September 2013 and approximately 850 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 September 2013, was £180.3 million, reflecting approximately 50.4 pence per share, an increase of 2.7% 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 September 2013, including income for the quarter, but does not include a provision for the quarterly dividend announced herein, which will be paid in November 2013.
The property portfolio will next be subject to an independent valuation during December 2013 and the NAV per share, as at 31 December 2013, will be issued in January 2014.
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 July 2013 to 30 September 2013 (1 April 2013 to 30 June 2013: 0.75 pence).
The dividend will be paid on 29 November 2013 to shareholders on the register on 15 November 2013. The ex-dividend date will be 13 November 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 13.9 years.
As at 30 September 2013, net gearing, calculated as total debt including ZDPs less cash, as a proportion of gross property value, was 53.5% (June 2013: 54.1%).
MARKET BACKGROUND
The IPD Monthly Index recorded stronger returns in September compared to June. Total returns in the three months to September 2013 were 2.9% (June 2013: 1.9%). The income return was unchanged over the quarter at 1.7%. Capital growth at 1.2% was the strongest since July 2010 and has now grown for four consecutive quarters.
Across the principal IPD sectors, office values rose by 2.2% (June 2013: 0.8%), industrial by 1.7% (June 2013: 0.4%) and retail by 0.4% (June 2013: -0.3%). Over the quarter 28 of the 37 IPD segments recorded positive movements compared to 17 in June and 4 in March.
The occupancy rate on the Index was 90% in September up from 89% in June 2013.
PORTFOLIO UPDATE
Over the quarter we have completed 12 lettings adding £483,000 per annum to the rent roll after incentives, and renewed five leases with a combined rent of £249,000 per annum. Two rent reviews were completed at a nil increase. The occupancy rate rose to 90% as a result of the leasing activity referred to below (June 2013: 89%).
Overall, the letting transactions were slightly ahead of ERV. In addition, terms were agreed on a further 11 vacant properties with a combined annual rent of over £750,000 per annum.
A selection of activity over the quarter included:
Offices
· Let the third floor of Stanford House in Covent Garden at £173,000 per annum, 3% above the June ERV.
· At Waterside House, Leeds secured £248,000 per annum of Government income until 2019 by removing the 2014 break clause in lieu of six months rental incentive.
· In Marlow, let the remaining suite at Atlas House at £78,000 per annum in line with ERV.
· At Boundary House, London EC3, retained £93,000 per annum for a minimum of 3 years, in line with ERV, though a lease renewal. Completed the comprehensive refurbishment of the reception and first floor common areas to facilitate the letting of the one vacant suite which has an ERV of £62,500 per annum.
· Let smaller suites at our properties in Cardiff, Colchester, Glasgow and St. Albans at a combined rent of £67,000 per annum after incentives.
Industrial
· Purchased Lyon Business Park in Barking for £9.48 million on 24 September, providing additional income of £0.65 million per annum.
· Completed the letting of units 1 and 3 at Heron Industrial Estate, Reading ahead of ERV at a combined rent of £82,000 per annum. The estate is now fully let.
· Surrendered two small units at Nonsuch Industrial Estate in Epsom for consideration of £60,000, in order to meet demand from trade counter operators.
Retail
· At Scots Corner in Birmingham extended income of £75,000 per annum for a further 10 years, in lieu of 12 months rental incentive.
· In Huddersfield, a unit was returned as a result of a retailer failure resulting in a loss of £80,000 per annum of income. Agents have been appointed and the unit is now being marketed.
As at 30 September 2013, the portfolio had a net initial yield of 6.7% and a net reversionary yield of 8.0%. The weighted average unexpired term (to first termination) was 6.7 years.
Post Quarter Update
Following this period end, planning permission was achieved in respect of Stanford House, London WC2 and a further unit was acquired at Angel Gate, London EC1. Further details will be included in the Interim Results, which are expected to be announced in the week commencing 11 November 2013.
Appendix
NET ASSETS SUMMARY
The unaudited NAV is as follows:
| 30 Sept 2013 £million | 30 June 2013 £million | 31 March 2013 £million | |
| Investment properties * | 396.7 | 382.3 | 382.7 |
| Other assets | 13.8 | 12.3 | 12.3 |
| Cash | 19.2 | 24.7 | 22.9 |
| Other liabilities | (15.7) | (16.1) | (15.1) |
| Borrowings: Loan facilities Loan stock ZDP's |
(208.1) (2.1) (23.5) |
(208.4) (2.1) (23.1) |
(208.6) (2.1) (22.7) |
| Net Assets | 180.3 | 169.6 | 169.4 |
| Net Asset Value per share | 50.4p | 49.1p | 49.0p |
* 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 30 June 2013 | 169.6 | 49.1 | |
| Movement in property values | 3.7 | 2.1 | 1.0 |
| Share issue | 6.0 | - | - |
| Share premium | 0.3 | 0.2 | 0.1 |
| Net income after tax for the period | 3.3 | 1.9 | 0.9 |
| Dividends paid | (2.6) | (1.5) | (0.7) |
| NAV at 30 September 2013 | 180.3 | 2.7 | 50.4 |
PORTFOLIO COMPOSITION
The Company's current portfolio is structured as follows:-
| Sector | Weighting 30 September 2013 |
Like for Like Valuation Change |
| Industrial | 37.1% | 1.2% |
| Retail | 18.8% | 2.3% |
| Office - Central/Greater London | 18.6% | 3.1% |
| Office - Rest of UK | 14.4% | -0.9% |
| Retail Warehouse | 6.7% | 1.5% |
| Leisure | 4.4% | 0.0% |
| Total | 100% | 1.4% |
GEOGRAPHICAL WEIGHTINGS
| Geography | Weighting 30 September 2013 |
| Central & Greater London | 29.8% |
| South East | 28.2% |
| Midlands | 16.3% |
| North | 14.9% |
| Wales | 5.3% |
| South West | 3.2% |
| Scotland | 1.8% |
| Northern Ireland | 0.5% |
| Total | 100% |
TOP TEN ASSETS
The top ten assets, which represent 46.1% of the portfolio by capital value, are detailed below.
| Asset | Sector |
| River Way Industrial Estate, Harlow | Industrial |
| Unit 5320 Magna Park, Lutterworth | Industrial |
| Stanford House, Long Acre, WC2 | Retail |
| 50 Farringdon Road, EC1 | Office |
| Angel Gate Office Village, City Road, EC1 | Office |
| Phase II Parc Tawe, Swansea | Retail Warehouse |
| Boundary House, Jewry Street, EC3 | Office |
| 1 Chancery Lane, WC2 | Office |
| Colchester Business Park, Colchester | Office |
| Angouleme Way, Bury | Retail Warehouse |
This information is provided by RNS
The company news service from the London Stock Exchange
END
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