Town Centre Securities

LN: TOWN

£111.6m market cap

210p 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

FY19 operational performance was robust, supported by active asset management, 2.6% like-for-like passing rent growth, increased occupancy and continued growth in the car park operations. Further progress in repositioning the portfolio saw Retail fall below 50% of the portfolio (vs 70% in 2016) as capital was recycled into more attractive areas, including the group’s significant pipeline of development opportunities. EPRA earnings fell 7.9% to £6.4m driven by various factors including investments, the short-term impact of CVAs and non-recurring dilapidation income in the prior year, while EPRA NAV per share was 7.8% down at 354p including a negative 3.8% like-for-like unrealised valuation movement. However, DPS was maintained at 11.75p and was fully covered by the 12.0p of EPRA earnings. As a family controlled business, TCS has a strong commitment to dividends and DPS has now grown or been held in each of the past 59 years. Net cash borrowing fell to the lowest level in three years although LTV increased, driven by the lower asset values.

Y/E Jun
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2018A 19.3 N/A 6.9 13.0 16.2 7.8
2019A 19.6 N/A 6.4 12.0 17.5 10.1
2020E 19.4 N/A 6.0 11.4 18.4 6.6
2021E 20.6 N/A 7.0 13.2 15.9 7.3
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. Rents and capital values in the retail sector have continued to weaken.

Last updated on 14/11/2019
Share price graph
Balance sheet
Forecast net debt (£m) 195.4
Forecast gearing ratio (%) 108
Price performance
%
1m
3m
12m
Actual 5.0 14.8 (11.8)
Relative* 3.8 11.5 (15.2)
52-week high/low 247.0p/171.0p
*% relative to local index
Key management
Edward Ziff Chairman & Chief Executive
Mark Dilley Finance Director

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