Circle Property


£52.3m market cap

183p 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

In the six months ending 30 September 2018 (H119) Circle Property continued to generate strong returns. The H119 NAV total return of 21.1% takes the total return since IPO in February 2016 to 93%, a compound annual average of 29.0%. H119 net rental income increased 35% on H118 and NAV per share increased 20% to 275p per share. DPS increased c 15% y-o-y, to 3.0p, well covered (c 1.5x) by Edison adjusted earnings (income earnings). Rising income and capital values reflects continuing progress with the letting recently refurbished space, of which we forecast more to come. Meanwhile management is seeking to replenish the refurbishment pipeline, and accretive reinvestment of the proceeds from recent sales of mature assets represents potential upside to our forecasts. A new debt facility has been agreed, replacing the existing £55m facility with a larger £100m facility and extending maturity at modest additional cost.

Y/E Mar
Revenue (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 4.4 2.3 10.0 3.14 58.3 N/A
2018A 5.5 3.2 14.0 8.99 20.4 16.3
2019E 7.0 4.5 16.3 9.37 19.5 16.9
2020E 7.5 5.0 5.1 10.96 16.7 10.0
Last updated on 28/02/2019
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 28/02/2019
Share price graph
Balance sheet
Forecast net debt (£m) 45.9
Forecast gearing ratio (%) 58
Price performance
Actual (4.9) (8.0) 16.2
Relative* (8.6) (9.4) 19.4
52-week high/low 230.0p/156.0p
*% relative to local index
Key management
Edward Olins Chief Operating Officer
John Arnold Chief Executive