28th Nov 2013 12:46
LONDON (Alliance News) - LondonMetric Property PLC said Thursday it swung to profit in the first half, as it sold three properties in two separate transactions, generating significant returns in the time it has owned the properties.
The property investment company posted pretax profit of GBP44.7 million for the period ended September 30, compared with a GBP3.7 million loss a year earlier as it also benefited from a change in fair value of derivative financial instruments.
Gross rental income increased to GBP28.9 million during the period, up from GBP13.8 million in the corresponding period, driven by acquisitions. This included 14 properties for GBP160.4 million during the period.
Post period LondonMetric acquired a portfolio of 10 Odeon multiplex cinemas for GBP80.6 million, providing a net initial yield of 7.2%
The property company said it sold the Nottingham Road Retail Park in Mansfield and St Mary's Road in Sheffield to Henderson Global Investors for GBP19.2 million, reflecting a net initial yield of 6.8% and generating a blended ungeared total return of 14% a year.
It had bought the Mansfield property in 2010 for GBP7.25 million and sold it for GBP11.5 million. It bought the Sheffield Property for GBP2.4 million in 2011 and sold it for GBP7.7 million
Separately, the company's joint venture with the Universities Superannuation Scheme completed the sale of a Wickes Ltd. unit in Oxford for GBP12.4 million to Lothbury Investment Management, reflecting a net initial yield of 5.3%. Its share of the sale price is GBP4.1 million.
"These disposals clearly endorse the validity of our business model by demonstrating the potential value that can be created through institutionalising good-quality secondary stock and demonstrates the depth of demand amongst institutional investors for well-let real estate assets," LondonMetric Chief Executive Andrew Jones said in a statement.
"The disposals allow us to crystallise attractive profits on cost and recycle our equity following completion of the asset management initiatives," he added.
The company said net debt fell to GBP322.8 million from GBP572.2 million in March.
The interim dividend remained unchanged at 3.5 pence per share.
LondonMetric shares were down 0.50 pence at 132.00p early Thursday.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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