Palace Capital

LN: PCA

£153.7m market cap

337.5p 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

H120 property level return was a positive 1.5%, supported by a focus on regional office and industrial property and low retail exposure. The flagship Hudson Quarter development in York continues to make good progress with more than 20% of the residential units already pre-sold or under offer. Reported earnings included lease surrender income and positive recurring and deferred tax effects arising from REIT conversion in addition to property revaluation effects. Recurring adjusted earnings of £3.9m (H119: £4.3m) or 8.5p per share showed the expected impact of lettings deferral as the company invests in several assets to improve their quality and enhance future income and capital value potential. DPS was maintained at 9.5p, 90% covered by current earnings, reflecting management’s confidence in the prospects for future income (and value) growth. Given the lag to completion and letting, capex is yet to be reflected in the valuation and EPRA NAV per share reduced to 391p (March: 407p).

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2018A 16.7 10.7 8.5 21.2 15.8 N/A
2019A 18.8 12.4 8.9 17.3 19.4 N/A
2020E 20.7 14.1 8.0 16.7 20.1 N/A
2021E 18.1 11.7 8.1 17.6 19.0 N/A
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. Rents and capital values in the retail sector have continued to weaken.

Last updated on 23/01/2020
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 4.7 19.6 10.6
Relative* 4.3 12.3 0.2
52-week high/low 342.0p/265.0p
*% relative to local index
Key management
Neil Sinclair CEO
Stephen Silvester CFO

Content on Palace Capital