Town Centre Securities

LN: TOWN

£100.8m market cap

190p last close

Town Centre Securities is a UK REIT focused primarily on Leeds, Manchester, Scotland and (mainly suburban) London. It also has a car parking operation (CitiPark). The investment portfolio is intensively managed for income and capital growth.

Investment summary

The company will report results for the year ended 30 June 2019 (FY19) on 24 September. Ahead of that, a recent trading update stated that the year ended in line with expectations despite the tough retail environment with continuing progress in the strategy of repositioning the portfolio away from retail and recycling capital into more attractive areas, including the group’s significant pipeline of development opportunities. Llike-for-like passing rents increased and occupancy rose to 96% (FY18: 95%). The car parking operations continued to grow revenues and profits. A lack of exposure to the big high street names in its retail portfolio, and a tenant profile that includes a number of strong covenants, mitigated the impact of retail sector problems and the fast re-letting of most of the vacated properties, on favourable terms, is a positive indicator for the quality of the portfolio. We forecast robust recurring earnings and expect an unchanged but fully covered dividend, providing an attractive yield. NAV is likely to reflect the continued market weakness in retail valuations.

Y/E Jun
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 19.4 13.8 7.0 13.2 14.4 5.6
2018A 19.3 13.6 6.9 13.0 14.6 7.1
2019E 20.1 13.4 6.4 12.1 15.7 7.0
2020E 20.4 13.6 6.6 12.4 15.3 6.8
Last updated on 16/09/2019
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 16/09/2019
Share price graph
Balance sheet
Forecast net debt (£m) 173.3
Forecast gearing ratio (%) 90
Price performance
%
1m
3m
12m
Actual 3.3 (5.0) (28.0)
Relative* (0.2) (5.4) (27.9)
52-week high/low 272.0p/180.0p
*% relative to local index
Key management
Edward Ziff Chairman & Chief Executive
Mark Dilley Finance Director