25th Feb 2015 08:00
LONDON (Alliance News) - SEGRO PLC Wednesday reported a slight drop in earnings per share for 2014 as a result of disposals it made during its almost completed restructuring programme, but said it was seeing strong demand for its rental properties and rising rental income is set to continue growing in London and the southeast of England.
The company is now focused on logistics properties like retailer distribution hubs after re-shaping its portfolio by selling off other assets.
Disposals as part of that programme meant EPRA earnings per share fell to 17.2 pence in 2014, from 17.7 pence in 2013, although the reduced rental income after the disposals was partially offset by investment activity and lower operating and finance costs.
Its pretax profit rose to GBP654.4 million, from GBP212.1 million a year earlier, while its EPRA net asset value per share rose to 384 pence, from 312 pence, reflecting improving asset values, asset management and development gains.
The company said its strategic repositioning is now substantially complete having disposed of GBP1.6 billion worth of assets and investing GBP1.3 billion in new assets since November 2011.
"The actions taken have improved the quality, resilience and growth potential of our portfolio and resulted in a lower risk capital structure," Chief executive David Sleath said in a statement.
"Looking ahead, the structural drivers of demand for our products, combined with an improving economic situation in the UK and accommodative monetary policy across all our markets, are likely to be supportive of property returns. We are taking advantage of these favourable market trends through the delivery of 240,000 square metres of new warehouse and logistics space into our markets in the coming months. We have an excellent land bank which could deliver a further 1.6 million square metres of space over the next few years," he added.
SEGRO raised its final dividend by 0.3 pence to 10.2p, a move it said reflected its confidence in its long-term prospects.
Like-for-like rental growth was up 2.4% across its portfolio in 2014, including a 4.9% increase in the UK. It contracted GBP35.4 million of new rent, up 16% on 2013.
It predicted that the occupational market conditions would improve in most of its key geographies in 2015, and it expects further rental growth in London and Southeast England. It's also expecting investment market appetite to remain strong, supported by relatively high yields, low interest rates, quantitative easing in the eurozone and rental growth in UK industrial markets.
By Steve McGrath; [email protected]; @stevemcgrath1
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