Picton Property Income

LN: PCTN

Market Cap£568.4m

Last Close 103.8p

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 proactive management of the portfolio.

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Investment summary

The H122 IFRS net profit of £53.9m was the highest ever recorded by Picton in a six-month period. Excluding capital growth (valuations +7.4% like-for-like), EPRA earnings and dividends both grew while occupancy increased (to 93% vs 91% at end-FY21) and rent collection remained strong. H1 DPS of 1.7p was 121% covered by EPRA earnings and the annualised rate of quarterly DPS (3.4p) is almost back to pre-pandemic levels (3.5p). NAV per share increased 8.5% to 105p and including DPS paid the total return was 10.2%. Significant rent reversion potential represents a strong organic growth opportunity while low gearing and a strong balance sheet can support further accretive acquisitions. Picton is also attuned to the value-creating potential of sector consolidation, seeking to exploit its strong performance record and scalable internalised management structure.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2020A 33.6 28.1 22.4 4.14 25.1 26.5
2021A 33.5 28.1 33.8 6.20 16.7 21.8
2022E 35.0 29.4 78.2 14.33 7.2 18.4
2023E 35.8 29.9 52.2 9.58 10.8 17.9
Industry outlook

The commercial property market is cyclical, historically exhibiting substantial swings in capital values through cycles while income returns have been more stable. The pandemic continues to generate uncertainty but the rebounding GDP growth, continuing low interest rates and lockdown easing are supporting strong commercial property returns, still led by the industrials, but broadening across all sectors.

Last updated on 21/01/2022
Content on Picton Property Income
Interview with Michael Morris, CEO of Picton Property Income
Real Estate | Edison TV | 23 November 2021
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Share price graph
Balance sheet
Forecast net cash (£m) 158.8
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 4.0 5.0 27.1
Relative* 2.2 2.1 14.6
52-week high/low 106.0p/78.8p
*% relative to local index
Key management
Nicholas Thompson Chairman
Michael Morris CEO
Andrew Dewhirst FD