Picton Property Income

LN: PCTN

£476.4m market cap

87p last close

Picton Property Income is an internally managed UK REIT that invests in a diversified portfolio of commercial property across the UK. It is total return driven with a strong income focus and aims to generate attractive returns through pro-active management of the portfolio.

Investment summary

Positive total returns continued in the three months ended 30 June 2019 (Q120) with a NAV total return of 1.3% (c 5.3% annualised), comprising a 0.3% increase in EPRA NAV per share to 93.0p and a quarterly dividend paid of 0.875p (an annualised 3.5p). Returns continue to benefit from an overweighting of industrial and regional offices properties and an underweighting of retail and leisure. The current year will see a focus on asset management projects aimed at capturing strong reversionary rent potential, enhancing the quality of the assets and generating additional value. Income is being temporarily reduced until these projects complete but dividends remained fully covered in Q119 and income should build through the year. Additionally, moderate gearing (LTV further reduced in Q120 to 24.1%), together with the £7.1m proceeds from a recent placing of new shares, provide funding flexibility for any acquisition opportunities that may emerge.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2018A 38.4 N/A 64.7 4.2 20.7 13.4
2019A 38.3 N/A 31.4 4.3 20.2 13.5
2020E 35.2 N/A 28.3 3.9 22.3 16.1
2021E 37.3 N/A 34.4 4.2 20.7 14.5
Last updated on 18/09/2019
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 18/09/2019
Share price graph
Balance sheet
Forecast net debt (£m) 175.3
Forecast gearing ratio (%) 34
Price performance
%
1m
3m
12m
Actual 1.8 (8.9) (3.8)
Relative* (1.6) (9.1) (3.5)
52-week high/low 98.6p/79.4p
*% relative to local index
Key management
Nicholas Thompson Chairman
Michael Morris CEO
Andrew Dewhirst FD

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