3rd Jun 2014 09:41
LONDON (Alliance News) - Real estate investment trust LondonMetric PLC Tuesday reported higher profit for its last financial year as rental income rose, costs fell and it booked a big profit on the revaluation of investment properties.
The company also continued to recycle and reposition its portfolio, selling a completed retail development at Berkhamsted and more sites from its Odeon and DFS portfolios, and buying a Royal Mail distribution centre in Rotherham.
The investor in retail, distribution and greater London property reported a pretax profit of GBP126.7 million in the year to end-March, compared with a loss of GBP9 million a year earlier, as net rental income rose to GBP51.3 million, from GBP29.2 million, and it booked a GBP87.5 million profit on the revaluation of investment properties, up from GBP8.4 million last year.
Its revaluation surplus was GBP95.9 million, up from GBP20.3 million a year earlier, while net asset value per share rose to 121 pence, from 108 pence.
Still, it is keeping its dividend for the year flat at 7.0 pence after paying a final dividend of 3.5 pence.
"The team has materially repositioned the portfolio with nearly £1 billion of investment activity which has added over GBP10 million to our annualised rent roll, increased the length of our leases and replenished our stock of development opportunities," Chairman Patrick Vaughan said.
"I believe we are somewhere in the middle of the cycle for UK commercial property in which an improving economy, the availability of reasonably priced credit and strong competition for supply makes the investment market very competitive, but I am confident that we will maintain a high level of investment and build on the activity this year for future outperformance and further excellent returns for our shareholders," he added.
Chief Executive Andrew Jones said it has seen a big change in the UK property market outside the south east over the last six months, with liquidity returning to the majority of the market for the first time since the financial crisis.
"As yields on prime real estate head towards record lows there is an increasing acceptance that yield compression is a button that can't be pushed forever. Conversely strong secondary assets continue to offer higher sustainable income returns and with an improving economic outlook and little new development, will also begin to deliver real income growth," Jones said.
"Our focus on out-of-town retail and distribution has not only simplified the business but created a portfolio of good quality real estate with strong occupier appeal and desirable income characteristics, as well as laying the foundations for income growth," the CEO added.
The company made acquisitions totalling GBP405.6 million during the year, while total disposal proceeds were GBP568.4 million.
In a separate statement Tuesday, the company said it has now sold the M&S Simply Food at Berkhamsted for GBP12.45 million to Lothbury Property Trust, sold an Odeon Multiplex cinema in Huddersfield for GBP15.2 million to TIAA Henderson Real Estate, and sold three DFS warehouse units out of its DFS joint venture for GBP17.1 million. At the same time, it has bought a Royal Mail distribution unit in Rotherham for GBP10.3 million, reflecting an initial yield of 6.0%.
LondonMetric shares were down 0.2% at 145.1 pence Tuesday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
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