Last close As at 05/08/2026
GBP0.74
▲ 1.10 (1.50%)
Market capitalisation
GBP382m
Research: Real Estate
Picton Property Income has completed a new £50m revolving credit facility (RCF) to replace two existing facilities that were due to expire in June 2021. Although initially undrawn, the facility maintains operational and financial flexibility, for a longer duration, at a slightly reduced cost. We expect FY20 results to be released later in June, although no date has been confirmed, including an update on the impact of COVID-19. The company entered this period of acute economic and sector uncertainty with a strong and liquid balance sheet and material internal asset management opportunities to support income and capital values.
Picton Property Income |
Maintaining balance sheet strength and flexibility |
Debt refinancing |
Real estate |
1 June 2020 |
Share price performance
Business description
Analyst
|
|||||||||||||||||||||||||||||||||||||
Picton Property Income has completed a new £50m revolving credit facility (RCF) to replace two existing facilities that were due to expire in June 2021. Although initially undrawn, the facility maintains operational and financial flexibility, for a longer duration, at a slightly reduced cost. We expect FY20 results to be released later in June, although no date has been confirmed, including an update on the impact of COVID-19. The company entered this period of acute economic and sector uncertainty with a strong and liquid balance sheet and material internal asset management opportunities to support income and capital values.
Year end |
Net property income (£m) |
EPRA earnings* (£m) |
EPRA |
DPS |
EPRA NAV/ |
P/NAV |
Yield |
||
03/18 |
38.4 |
22.6 |
4.2 |
3.43 |
90 |
0.77 |
4.9 |
||
03/19 |
38.3 |
22.9 |
4.3 |
3.50 |
93 |
0.75 |
5.0 |
||
03/20e |
34.5 |
20.6 |
3.8 |
3.25 |
93 |
0.75 |
4.7 |
||
Note: *EPRA earnings excludes revaluation gains/losses and other exceptional items.
Picton has a strong and liquid balance sheet with a low loan to value ratio (LTV) of c 22%. Like the facilities it replaces, the new RCF is initially undrawn but provides access to an additional £50m of borrowing for a minimum of three years, thus extending operational and financial flexibility, including the ability to undertake acquisitions when market conditions are appropriate. It is secured on the same eight assets and is for an initial term of three years with the option of two, one-year extensions and will incur interest at 150bp over Libor on drawn balances, which is 40bp lower than applied to the facilities it replaces. A commitment fee of 60bp applies to undrawn balances. Current drawn debt is all fixed rate with the first maturity in 2027 and, if the RCF were fully utilised, the combined debt maturity would be 8.3 years and the weighted average interest rate would reduce from 4.2% to 3.7% pa.
We expect results for the year ended 31 March 2020 (FY20) to be reported later in June, although the exact date has not been confirmed. The COVID-19-induced lockdown came too late to materially affect Q420 rent collection and while Q120 saw a slowdown the last reported position remained robust, in part helped by a significant underweighting of the more challenged retail and leisure sectors (with no shopping centre exposure). The company has already provided dividend guidance in response to the COVID-19 impact on occupiers and cash flow, previously announcing a Q420 DPS of 0.625p per share (Q320: 0.875p per share), an annualised 2.5p per share compared with 3.5p previously.
Picton Property Income is a research client of Edison Investment Research Limited
|
|
Research: Investment Companies
Tetragon Financial Group (TFG, Tetragon) achieved a 13.6% NAV/share total return and a 13.4% ROE in FY19, in line with its long-term target of 10–15%. The main driver of Tetragon’s performance was its asset management business (TFG Asset Management), which comprises managers with a total AUM attributable to Tetragon of US$27.4bn and generated an EBITDA of US$59.5m in FY19 (up 51% y-o-y). The late-2019 investment activity left Tetragon with a relatively low net cash position (4.1% of NAV at end-April). The shares trade at a three-year average discount to NAV of 44% (currently at 62.7%), which is relatively wide compared to peers given the company’s track record of delivering a 16% NAV TR pa over the last 10 years. The recent market sell-off has so far resulted in a 5.1% decrease in NAV (ytd to end-April 2020).