26th Feb 2014 11:06
LONDON (Alliance News) - Property developers Segro PLC said it swung to a full-year profit, after its 2012 results were dented by a revaluation loss.
The company which manages and develops modern warehousing, light industrial and data centre properties posted pretax profit of GBP212.1 million for the period ended December 31, compared with a loss of GBP202.2 million a year earlier, when it was hit by a GBP340.0 million loss on realised and unrealised property.
Revenue, however, dipped slightly to GBP339.8 million from GBP371.0 million in 2012, due to lower rental income from investment and trading properties, despite 196 new leases.
Segro said the main difference compared with the prior year is in the level of take-up from completed developments which was GBP7.7 million down from GBP14.6 million in 2012.
Like-for-like net rental income fell 1.5% due to GBP1.9 million of net take-backs of existing space and a bad debt expense related to tenant, Mory Ducros - France's second biggest courier firm which went into administration last year.
During the period, Segro made GBP591 million of disposals, GBP141 million in acquisitions including Zeran Park II a logistic site in Warsaw, Poland for GBP36.9 million. It also spent GBP108 million spent on development projects and reduced net debt by 30% to GBP828 million from GBP1.46 billion a year earlier.
The reduction in net debt was achieved through net divestments - disposals less acquisitions and development expenditure - of GBP342 million, and through the creation of the SEGRO European Logistics Partnership SELP
SELP is a 50-50 joint venture with Public Sector Pension Investment Board, which it hopes will increase the use of third party capital and expand exposure to the European logistics market.
Overall, the vacancy across the portfolio rose to 8.5% compared with 8.2% a year ago, but fell from the 9.5% recorded in June 2013. Its net asset value per share rose 6.1% to 312 pence to 294 pence.
Looking ahead the firm said, "We have started the year with good momentum from our acquisition, leasing and development programmes and we expect that the marked improvement in investor appetite for high quality warehouse and logistics assets, which has driven significant capital value growth in the second half of 2013, will be sustained in 2014."
The firm declared an unchanged final dividend of 9.9 pence bring its total for the year to 14.8 pence per share.
The real estate investment trust was trading at 352.10 pence Wednesday morning, down 5.70 pence or 1.6%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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