Circle Property

LN: CRC

£54.5m market cap

191p last close

Circle Property is an AIM-quoted property investment company that actively manages its assets, placing an emphasis on total returns rather than maximising short-term income. It targets the acquisition of well-located regional office properties where it has identified a clear opportunity to add value.

Investment summary

Circle Property’s ability to create value by acquiring and asset managing well located assets is demonstrated by continuing strong NAV growth. In FY19, NAV per share increased 20% to 277p, driven by the successful letting of recently refurbished assets, with contracted annualised rental income up 12%. Total dividends for the year increased 12.5% to 6.3p. Including dividends paid the NAV total return was 23%, taking the aggregate total return since IPO in February 2016 to c 95%, or a compound annual average of c 26%. Since end-FY19, the letting of the remaining space at Kents Hill Business Park, at above ERV (estimated rental value), has added more than £350k to rent roll and will support valuations further. The acquisition for £14.6m of a well-located business park in Maidenhead, part-funded by drawing on the recently agreed £100m financing facility, provides an additional asset management opportunity and the company continues to target further acquisitions. Our forecasts are under review.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2018A 5.5 3.2 14.0 9.0 21.2 17.2
2019A 6.5 3.7 15.2 6.6 28.9 16.4
2020E N/A N/A N/A N/A N/A N/A
2021E N/A N/A N/A N/A N/A N/A
Last updated on 12/09/2019
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 12/09/2019
Share price graph
Balance sheet
Forecast net debt (£m) 45.9
Forecast gearing ratio (%) 58
Price performance
%
1m
3m
12m
Actual 0.5 (6.4) (5.0)
Relative* (1.7) (6.6) (4.8)
52-week high/low 204.0p/182.5p
*% relative to local index
Key management
Edward Olins Chief Operating Officer
John Arnold Chief Executive