Town Centre Securities

LN: TOWN

£63.5m market cap

119.5p 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

Financial and strategic progress in FY20 was punctuated by COVID-19, with a negative impact of c £3.6m (of which £2.0m at CitiPark due to temporary closures), reducing adjusted EPRA earnings to £2.6m (FY19: £6.4m) and EPS to 4.9p from 12.0p, forcing the first ever cut in annual DPS to 5.0p (FY19: 11.75p). Revaluation losses (6.9% like-for-like) drove a 17.4% reduction in EPRA NAV per share (to 292p) and an increase in LTV to 53.2%. Subsequent property disposals amounting to £41.2m improve the pro forma LTV to 47.2% and further reduce retail and leisure exposure (to below 41% compared with 47% at year-end). Rent collection has continued at a consistent and reassuring level (c 87%) through January 2021.

Y/E Jun
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2019A 19.6 N/A 6.4 12.0 10.0 5.7
2020A 16.1 N/A 2.1 4.9 24.4 4.4
2021E N/A N/A N/A N/A N/A N/A
2022E N/A N/A N/A N/A N/A N/A
Industry outlook

TThe 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 26/02/2021
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Share price graph
Balance sheet
Forecast net debt (£m) 195.4
Forecast gearing ratio (%) 108
Price performance
%
1m
3m
12m
Actual 2.1 3.0 (44.7)
Relative* 3.8 (0.1) (41.3)
52-week high/low 221.0p/81.5p
*% relative to local index
Key management
Edward Ziff Chairman & Chief Executive
Mark Dilley Finance Director

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