Picton Property Income

LN: PCTN

£481.9m market cap

89.4p last close

Picton Property Income is an internally managed UK REIT that invests in a diversified portfolio of commercial property across the UK. The investment objective is to provide investors with an attractive level of income and the potential for capital growth.

Investment summary

Picton delivered a solid performance in the three months to December 2018 (Q319), generating an NAV total return of 1.2% (or a compound annual 4.9%). The 0.875p quarterly DPS, annualising at 3.5p per share was 123% covered by income earnings. The portfolio value and net asset value both edged up, with NAV per share increasing 0.3% to 92.5p. There were no portfolio transactions during the period but active asset management continued, aimed at capturing the significant reversionary income potential contained in the portfolio (£6.4m at H119). Portfolio performance continues to benefit from an overweight in industrial and regional office property, where market rents and valuations have continued to grow, and a significant underweighting of retail and leisure (with no shopping centre exposure), where rents and values are under pressure. With moderate (c 25%) gearing and £26m of undrawn debt facilities, Picton is well placed to seize any opportunities that may emerge amidst increased Brexit uncertainty.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 47.9 N/A 43.2 3.81 23.5 13.3
2018A 42.9 N/A 64.7 4.19 21.3 13.8
2019E 41.9 N/A 36.2 4.26 21.0 15.7
2020E 41.3 N/A 32.8 4.22 21.2 15.0
Last updated on 18/02/2019
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 18/02/2019
Share price graph
Balance sheet
Forecast net debt (£m) 173.4
Forecast gearing ratio (%) 35
Price performance
%
1m
3m
12m
Actual 4.7 5.3 5.4
Relative* 1.4 2.4 7.0
52-week high/low 93.4p/79.4p
*% relative to local index
Key management
Nicholas Thompson Chairman
Michael Morris CEO
Andrew Dewhirst FD