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.
The commercial property market is cyclical, historically exhibiting substantial swings in capital values through cycles. Income returns have been significantly more stable, supporting rental growth across much of the market. Capital values are already c 25% down on the 2022 peak and should benefit from the expected decline in interest rates.
Real Estate |
Update
Real Estate |
Update
Real Estate |
Update
Real Estate |
Flash note
Andrew Dewhirst
FD
Lena Wilson
Chairman
Michael Morris
CEO
Forecast net cash (£m)
211
Forecast gearing ratio (%)
N/A
% | 1M | 3M | 12M |
---|---|---|---|
Actual | (2.5) | (9.8) | (9.6) |
Relative | (5.5) | (12.2) | (15.5) |
52 week high/low | 79.4p/61.6p |
The Q324 DPS of 0.875p was 108% covered by EPRA earnings with leasing activity locking in significant rental increases, all at or above estimated rental value and/or passing rent, while overall occupancy was unchanged at 90%, or 92% adjusted for the alternative use strategies being undertaken at two properties. Asset management and a strong weighting to better-performing industrial assets (59% by value) mitigated the impact of market-wide outward yield movements on valuations and the 1.5% like-for-like decline in portfolio values was less than the 2.7% negative movement in MSCI monthly data. Net asset value (NAV) per share was 2.5% lower at 96p and, adjusted for DPS paid, the NAV total return was -1.6%. Although merger talks with UKCM were halted, Picton continues to believe that there are strategic and financial benefits to combining complementary businesses, including economies of scale, increased diversification, and enhanced earnings.
Y/E Mar | Revenue (£m) | EBITDA (£m) | PBT (£m) | EPS (p) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2022A | 35.4 | 29.7 | 147.0 | 3.9 | 16.2 | 12.3 |
2023A | 36.3 | 30.3 | (89.5) | 3.9 | 16.2 | 11.2 |
2024E | 36.6 | 30.0 | 8.9 | 3.8 | 16.6 | 13.1 |
2025E | 37.8 | 30.9 | 22.0 | 4.0 | 15.8 | 10.9 |