20th Mar 2014 11:34
LONDON (Alliance News) - UK Commercial Property Trust Ltd Thursday said it swung to profit in the full year, after last year's results were dented by valuation losses, and said it planned to move towards a more "sustainable" dividend policy.
The Guernsey-based company posted net pretax profit of GBP96.1 million for 2013, compared with a GBP5.0 million loss a year earlier, as revenue rose to GBP121.1 million from GBP17.0 million in 2012.
UK Commercial Property's 2012 results were hit by a GBP58.5 million loss on investment properties, but the company turned that into a GBP48.4 million gain in 2013.
Revenue rose despite annualised rental income falling 6.1%. The largest single contributor to this reduction was the Coca Cola lease expiry at Charter Place, Uxbridge, which was sold in December. A number of lease expiries and breaks mainly within the company's shopping centres were also important factors.
Despite a strong performance, the company said it is moving towards a more "sustainable" dividend policy. The company's current dividend policy was set at launch in 2006 at a time of strong rental growth prospects.
However, it said the economic downturn has significantly undermined rental growth and, despite an improving economic outlook, the prospects for rental growth remain "muted "outside central London.
"While the company's balance sheet could have sustained the historic dividend level in the short term, ultimately this would have placed a strain on the company's resources," it said.
Therefore, the company has concluded that "re-basing the dividend to a more sustainable level of 0.92 pence per quarter from the first quarter 2014 - a reduction of 30% - is the most prudent course of action".
UK Commercial Property will, however, still pay 5.25 pence per share for 2013, unchanged from a year earlier.
The firm said its net asset value per share rose 5.0% to 73.1 pence from 69.6 pence, driven by portfolio capital growth, beneficial sale activity and a reduction in swap liabilities.
During the year, the company said it made good progress on sales. Including the sale of high street retail property at Buchanan Street, Glasgow, the company realised a total of GBP44.2 million from sales at a net exit yield of 2.3%. The firm sold 2-8 Buchanan Street for GBP10.45 million.
The company also made a number of purchases, including a multi-let industrial estate at Newton's Court Dartford, Kent for GBP17.9 million at a net initial yield of 6.4%.
Looking ahead, the company said its remains committed to providing shareholders with an attractive level of income and the re-basing of its dividend policy will allow it to invest in properties that will "in aggregate, form a portfolio with a better balance between income and capital growth potential."
The stock was trading at 79.22 pence Thursday morning, down 0.38 pence or 0.5%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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