24th Oct 2018 10:54
LONDON (Alliance News) - U & I PLC on Wednesday reported a rise in its interim net asset value as repositioning of investments resulted in increased gains.
The property regeneration company's net asset value for the six months to August-end increased 5.8% to GBP356.2 million from GBP336.8 million in the comparative year ago period.
Net asset value per share increased 5.6% to 284 pence from 269p a year ago.
The company's development and trading gains in the half increased 78% to GBP12.8 million from GBP7.2 million. The gains seen in the first half was in line with the company's full year target of between GBP45 million and GBP50 million.
"We have made good progress in the first six months of the year. We are confident that we have the strategy, team and pipeline to meet our GBP45 million to GBP50 million development and trading target for the full year and we remain well placed to benefit from the shortfall of quality mixed-use schemes, which continue to drive strong demand in our key, high-growth, geographies of London city region, Manchester and Dublin," said Chief Executive Matthew Weiner.
The company's investment portfolio saw its like-for-like capital value decrease by 2.6% to GBP4.5 million.
U & I said the negative performance reflects "current market sentiment" in the UK towards secondary retail - which is putting upward pressure on cap rates, regardless of the "quality or functionality" of the asset.
The company completed a GBP11.3 million acquisition in Bournemouth, England, in the period, which is expected to achieve more than 10% total return.
U & I is also making "strong progress" in securing lettings, giving the investment company a GBP700,000 valuation uplift in the half year.
The company is also re-gearing its lease at its Gemini building at Harwell, England, which will deliver "further capital uplift.
Weiner added: "We are seeing a growing number of opportunities to deliver value through our public private partnerships, trading and investment activities, as evidenced by our Cambridge win, exclusive negotiations for a new PPP project, three new trading projects under offer, and our acquisition in Bournemouth."
The company's first half pretax loss widened to GBP4.2 million from GBP3.3 million a year ago. Revenue increased 28% to GBP54.0 million from GBP42.1 million.
The firm declared an interim dividend of 2.4p, flat on the year before.
Looking ahead, U & I said it has important planning applications - which will be a "strong feature" in the second half.
The company believes this will "improve visibility" of future gains, although it does not expect to achieve these gains in the financial year 2019.
U & I remains confident in its outlook for the second half.
Shares in U & I were up 1.3% Wednesday at 209.76 pence each.
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