1st Jun 2016 06:47
LONDON (Alliance News) - LondonMetric Property PLC on Wednesday said it is positioning its portfolio to benefit from the rise of online shopping, after its pretax profit almost halved in its financial year due to its valuation surplus coming in much lower than a year earlier.
The FTSE 250-listed property investor posted pretax profit of GBP82.7 million for the year ended March 31, from GBP160.3 million a year earlier, after its revaluation surplus fell to GBP51.1 million from GBP112.4 million a year earlier. This fall was despite the rise in gross rental income to GBP67.9 million from GBP60.2 million, driven by a large increase in distribution rental income.
LondonMetric said this was the best performing retail sub sector due to "rapidly changing consumer shopping patterns and the need for retailers to continually invest in their distribution capabilities to remain competitive".
The company noted that since its merger in 2013 it has "consciously increased" its exposure to the distribution sector to 54% from 20% of the portfolio by value and this "is set to grow further".
LondonMetric posted EPRA earnings per share of 7.80 pence from 6.60p a year earlier, and said its EPRA net asset value per share grew to 147.70p from 140.60p a year earlier.
The company said it was offering a dividend of 7.25p per share, up from 7.00p a year earlier.
LondonMetric said it expects non-food online spending to increase to 25% at the end of 2019 from 17.4% today, noting that "it is now widely accepted by retailers that the supply chain is consumer facing requiring retailers to have fit for purpose logistics to meet the increasing consumer demands for instant gratification and quicker online delivery".
"Our focus on growing our income has delivered a substantial increase in EPRA earnings during the year and we will continue to grow our repetitive and predictable income further. As yield tranquillity sets in, the compounding impact of this repetitive effect is becoming increasingly attractive," said Chief Executive Andrew Jones.
"We continue to experience strong structural demand/supply dynamics in this sub sector and our 2.0 million square foot distribution development programme will help to deliver sustainable earnings and income growth as well as incremental returns. Our portfolio metrics are as strong as ever and we remain highly disciplined in our investment approach," Jones added.
Elsewhere, LondonMetric said Andrew Livingston was joining as a non-executive director with effect from May 31. Livingston has been the chief executive of tool retailer Screwfix since 2013.
LondonMetric added that Charles Cayzer, its senior independent director, will step down on September 30, and will be replaced by Philip Watson. Watson is the chief investment officer of Mirabaud Asset Management Ltd.
By Hannah Boland; [email protected]; @Hannaheboland
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