Picton Property Income


£498.6m market cap

92.5p 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 an income focus, and aims to generate attractive returns through pro-active management of the portfolio.

Investment summary

We expect Picton to report FY19 full year results in late May. In Q319 (to 31 December 2018) it delivered a solid performance with an NAV total return of 1.2% (or a compound annual 4.9%). The 0.875p quarterly DPS, annualising at 3.5p per share, was 123% covered by income earnings. The portfolio value and net asset value both edged up, with NAV per share increasing 0.3% to 92.5p. There were no portfolio transactions during the period but active asset management continued, aimed at capturing the significant reversionary income potential contained in the portfolio (£6.4m at H119). Portfolio performance again benefitted from an overweight in industrial and regional office property, where market rents and valuations continued to grow, and a significant underweighting of retail and leisure (with no shopping centre exposure), where rents and values are under pressure. With moderate (c 25%) gearing and £26m of undrawn debt facilities, Picton is well placed to seize any opportunities that may emerge amidst increased Brexit uncertainty.

Y/E Mar
Revenue (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 47.9 N/A 43.2 3.81 24.3 13.8
2018A 42.9 N/A 64.7 4.19 22.1 14.2
2019E 41.9 N/A 36.2 4.26 21.7 16.2
2020E 41.3 N/A 32.8 4.22 21.9 15.5
Last updated on 25/04/2019
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 25/04/2019
Share price graph
Balance sheet
Forecast net debt (£m) 173.4
Forecast gearing ratio (%) 35
Price performance
Actual 4.2 9.6 3.5
Relative* 0.3 0.5 3.2
52-week high/low 93.4p/79.4p
*% relative to local index
Key management
Nicholas Thompson Chairman
Michael Morris CEO
Andrew Dewhirst FD

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