Last close As at 05/08/2026
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▲ 1.10 (1.50%)
Market capitalisation
GBP382m
Research: Real Estate
Picton Property Income’s Q125 trading update shows DPS, increased by 6% from Q423, fully covered by EPRA earnings. Our unchanged forecasts show continuing earnings growth, driven by positive leasing momentum and asset management initiatives underway. Net asset value has stabilised, supported by improving sentiment in the property market and the prospect of interest rate reductions.
Picton Property Income |
Increased DPS driving positive returns |
Q125 trading update |
Real estate |
1 August 2024 |
Share price performance
Business description
Analyst
Picton Property Income is a research client of Edison Investment Research Limited |
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Picton Property Income’s Q125 trading update shows DPS, increased by 6% from Q423, fully covered by EPRA earnings. Our unchanged forecasts show continuing earnings growth, driven by positive leasing momentum and asset management initiatives underway. Net asset value has stabilised, supported by improving sentiment in the property market and the prospect of interest rate reductions.
Year end |
Net property income (£m) |
EPRA earnings* (£m) |
EPRA |
DPS |
NAV** per share (p) |
P/NAV |
Yield |
03/23 |
36.3 |
21.3 |
3.9 |
3.50 |
100 |
0.73 |
4.8 |
03/24 |
37.9 |
21.7 |
4.0 |
3.55 |
96 |
0.76 |
4.9 |
03/25e |
38.3 |
23.0 |
4.2 |
3.70 |
100 |
0.73 |
5.1 |
03/26e |
39.9 |
24.3 |
4.4 |
3.84 |
104 |
0.70 |
5.3 |
Note: *EPRA earnings exclude revaluation gains/losses and other exceptional items. **NAV measure is net tangible assets (NTA), currently the same as IFRS NAV.
Q125 DPS of 0.925p, an annualised 3.7p, was 102% covered by EPRA EPS. NAV per share of 96.0p showed no material change from end-FY23 (96.1p) and NAV total return was 0.9%.
Against the background of a robust occupier market, Picton is increasing rents and occupancy and reducing void property costs. New lettings, in the industrial and office sectors, added £0.5m to rent roll at a 7% premium to the estimated rental value (ERV). Lease renewals, across all sectors, with combined annual rent of £1.0m, were at an average 45% premium to the previous passing rent and 1% below the March ERV. A similar premium to previous passing rent, 1% above ERV, was achieved on rent reviews in the industrial sector with a combined annual rent of £0.6m. In addition, Picton supported the growth of three existing occupiers, which took additional space, generating an additional £0.4m of annual rent, 7% ahead of ERV, and an early lease re-gear secured annual rent of £1.6m until 2039.
EPRA occupancy increased to 93% (end-FY23: 91%), including leasing activity and completion of the sale of Angel Gate for £29.6m, a 2% premium to end-FY23 book value. Part (£16.4m) of the proceeds were used to repay in full the drawings from the floating rate revolving credit facility (RCF), with a cost of 6.8% pa, and the annualised interest cost saving of more than £1.1m was well ahead of the property’s annual rental income, net of property costs, of £0.7m. Adjusted for the impact of the two further office assets where an alternative use is being progressed, Longcross in Cardiff and Charlotte Terrace in West London, occupancy was 95%. Excluding the alternative use assets, the office weighting has reduced to 24.3%, most of which is of good quality with strong occupancy.
Like-for-like portfolio valuation increased 0.4% over the quarter, with industrial, warehouse and logistics assets continuing to show the most resilience, slightly above the 0.3% capital return for the MSCI UK Monthly Property Index. MSCI data now show three consecutive quarters of positive capital growth for the first time since 2022.
Following repayment of the RCF, debt has reduced to £211m (end-FY23: £228m), all long term, with an average fixed rate of 3.7% and a first maturity in 2031. The loan to value ratio has reduced to c 24.9% (end-FY23: 27.9%).
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Research: Consumer
Greggs’ H124 results demonstrate the ongoing benefits of its multiple levers to drive revenue growth as well as a pleasant surprise on operating margin. With a relatively normal environment for input cost inflation, management is optimistic about the outlook for the year. We have marginally increased our profit estimates, which has also fed through to an increase in our valuation.