Circle Property

LN: CRC

Market Cap£48m

Last Close 167.5p

Circle Property is an AIM-listed 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.

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Investment summary

FY20 results showed good growth in annualised contracted rental income (+14%), driven by leasing events, and net rental income (+12%). Operating profit before revaluation gains rose 17% and a final DPS of 2p took the total for the year to 5.3p (FY19: 6.3p). Valuation gains were positive but lower than in FY19. Subsequently reported valuations for the six months to 30 September (H121) show a marginal 1.1% reduction driven by refurbishment plans. Unaudited H121 NAV/share was 283p (FY20: 285p; FY19: 277p). Rent collection remains robust and at end-H121 the company held cash of £4.5m with immediately available borrowings of £2.7m. Asset disposals, where asset management plans are mature, are targeted along with a reduction in gearing (gross LTV 43.8% at end-H121).

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2019A 6.5 N/A 15.2 6.6 25.4 N/A
2020A 7.2 N/A 5.2 7.6 22.0 N/A
2021E N/A N/A N/A N/A N/A N/A
2022E N/A N/A N/A N/A N/A N/A
Industry outlook

The commercial property market is cyclical, historically exhibiting substantial swings in valuation through cycles while income returns have been more stable, but still fluctuating according to tenant demand and rent terms. The extent and duration of impact of the global pandemic on the economic outlook remains uncertain. While the supply demand balance for regional office and industrial property has hitherto remained generally firm the weakness that was previously confined to the retail sector is likely to continue to broaden.

Last updated on 18/11/2020
Content on Circle Property
Circle Property – Active investment in regional offices
Financials | research Outlook | 12 November 2019
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Share price graph
Balance sheet
Forecast net debt (£m) 45.9
Forecast gearing ratio (%) 58
Price performance
%
1m
3m
12m
Actual 3.7 6.4 (18.7)
Relative* (4.0) 1.1 (8.7)
52-week high/low 229.0p/147.5p
*% relative to local index
Key management
Edward Olins Chief Operating Officer
John Arnold Chief Executive