Picton Property Income

LN: PCTN

£473.7m market cap

86.5p 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 proactive management of the portfolio.

Investment summary

With continuing strong rent collection and progress with leasing, Q321 DPS increased 14% to 0.8p (an annualised 3.2p), following the 12% increase in Q221 DPS to 0.7p. EPRA NAV per share increased 3.0% to 95.5p (Q220: 92.7p) reflecting a 2.7% like-for-like increase in portfolio value, driven by the industrial assets that make up c 52% of the portfolio. Q321 NAV total return was 3.7% and DPS paid was 122% covered by EPRA earnings which included additional provisions against outstanding rents. Net LTV remains low (21.3%) with £50m of undrawn borrowing facilities available and the portfolio continues to offer significant opportunities to grow income, primarily through void reduction (end-Q321 occupancy steady at 90%) from leasing recently refurbished assets.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2019A 38.3 32.5 31.4 4.25 20.4 13.4
2020A 33.6 28.1 22.4 3.66 23.6 22.1
2021E 32.7 27.7 10.2 3.60 24.0 20.1
2022E 33.9 28.3 20.4 3.74 23.1 15.4
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 pandemic and Brexit contribute to a highly uncertain UK economic outlook and 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 04/03/2021
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Share price graph
Balance sheet
Forecast net debt (£m) 148.5
Forecast gearing ratio (%) 31
Price performance
%
1m
3m
12m
Actual 2.1 8.8 (13.1)
Relative* (0.2) 6.2 (13.0)
52-week high/low 98.5p/52.0p
*% relative to local index
Key management
Nicholas Thompson Chairman
Michael Morris CEO
Andrew Dewhirst FD

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