21st May 2018 11:43
LONDON (Alliance News) - McKay Securities PLC said Monday it had an "exceptionally productive year" as its profits increased and it hit a record high for rental income.
For the year ended March, posted a pretax profit of more than double the previous year to GBP43.4 million from GBP17.6 million.
The London and south east England focused real estate investors gross rental income was up 5.1% to GBP21.8 million from GBP20.8 million the year before. A record high for the company.
This is after its portfolio valuation reached a "historic high" of GBP460.2 million generating a 6.1% valuation surplus of GBP26.5 million outperforming the IPD All Property index return of 5.3%. Last year its portfolio was valued at GBP429.9 million.
The letting of its Greyfriars Road in Reading, Prospero Hill in Redhill and Lombard Street in London properties contributed a 23% increase in contracted rents on a like-for-like basis to GBP27.1 million per year, up from GBP23.42 million the year before.
A "record year of lettings" for McKay saw 26 open market lettings contribute GBP7.0 per annum to a 23% increase like-for-like in contracted rental income of GBP27.1 million per annum.
McKay's net asset value per share increased 6.3% to 322.00 pence from 303.00 the year before.
The real estate investment company is recommending a final dividend of 7.2 pence per share, up 14% from 6.3p the year before. Its full year dividend is up 11% to 10.0p from 9.0p the previous year.
Despite the risks surrounding Brexit, McKay believes it assets are "well placed" to deliver "further shareholder value" as the markets it operates in "continue to prove robust".
Chief Executive Simon Perkins said: "We are now reaping the benefit of the many asset management initiatives that we have been working on, but particularly the decision made to speculatively develop three office schemes back in 2014. Each scheme has been exceptionally well received, with two of them fully let during the period and the third at 92% occupancy.
"We have continued to release value from the significant reversion these initiatives have generated, delivering higher levels of income and capital gains. Through our strong in-house asset management team, we have secured record income from lettings, ahead of ERV [estimated rental value], and have opportunistically sold properties significantly above book value.
"With the benefit of these gains, we took the decision to cancel the remaining legacy swap at the end of the period which, along with recent lettings will make a positive contribution to future earnings."
Shares in McKay Securities were up 2.7% to 277.90 pence each Monday.
Related Shares:
MCKS.L