Palace Capital

LN: PCA

£140.4m market cap

306p last close

Palace Capital is a UK property investment company. It is not sector-specific and looks for opportunities where it can enhance long-term income and capital value through asset management and strategic capital development in locations outside London.

Investment summary

Following the agreed £18.2m sale of most of the non-core residential assets acquired with the RT Warren portfolio last year, Palace Capital (PCA) has acquired a quality, mostly office building, in the heart of Liverpool for c £14m. The transactions represent a significantly positive yield arbitrage, enhancing existing strong reversionary potential. H119 was a period of consolidation following a year of significant developments, preparing the ground for the next stage of growth, although the company continued to deliver income and capital growth, generating a NAV total return of 4.0% in the period. H119 adjusted EPS (7.7p) and dividend cover (84%) were depressed by cash drag from the October 2017 capital raise, but dividend policy was unchanged, with management anticipating the benefits of accretive acquisitions and asset management. H119 reversionary income potential was £2.7m pa, while further opportunities reposition and grow the portfolio, including the Hudson Quarter development in York, and are positive indicators for future growth.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2017A 14.3 9.3 12.6 22.2 13.8 N/A
2018A 16.7 10.7 13.3 21.2 14.4 N/A
2019E 17.9 12.7 13.5 17.1 17.9 N/A
2020E 18.7 13.4 12.0 17.6 17.4 N/A
Last updated on 20/02/2019
Industry outlook

The supply demand balance for regional office and industrial property remains generally firm, and a positive yield spread between the regions and London offers potential for further narrowing. Parts of the retail sector are displaying clear signs of stress.

Last updated on 20/02/2019
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 0.0 (1.0) (3.8)
Relative* (3.3) (4.8) (3.0)
52-week high/low 364.0p/280.0p
*% relative to local index
Key management
Neil Sinclair CEO
Stephen Silvester CFO

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