Last close As at 05/08/2026
GBP0.74
▲ 1.10 (1.50%)
Market capitalisation
GBP382m
Research: Real Estate
Ahead of FY24 results to be published on 23 May, Picton Property Income has declared a Q424 DPS of 0.925p, a 5.7% increase on the previous quarter. The company intends to maintain fully covered dividends at the new level, an annualised run rate of 3.7p, well above the pre-pandemic DPS and the 3.5p paid in respect of FY24. The uplift reflects a continuing robust occupier market, supporting rental growth, as well as asset management activity, most notably the recent sale of Angel Gate. The sale was part of Picton’s strategy to accelerate the unlocking of value in its portfolio through the selective repurposing of office assets and accretively recycle the capital. Further repurposing asset management initiatives are being progressed.
Picton Property Income |
Unlocking value to drive DPS growth |
Q424 dividend |
Real estate |
2 May 2024 |
Share price performance
Business description
Analyst
Picton Property Income is a research client of Edison Investment Research Limited |
||||||||||||||||||||||||||||||||||
Ahead of FY24 results to be published on 23 May, Picton Property Income has declared a Q424 DPS of 0.925p, a 5.7% increase on the previous quarter. The company intends to maintain fully covered dividends at the new level, an annualised run rate of 3.7p, well above the pre-pandemic DPS and the 3.5p paid in respect of FY24. The uplift reflects a continuing robust occupier market, supporting rental growth, as well as asset management activity, most notably the recent sale of Angel Gate. The sale was part of Picton’s strategy to accelerate the unlocking of value in its portfolio through the selective repurposing of office assets and accretively recycle the capital. Further repurposing asset management initiatives are being progressed.
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 |
0.66 |
5.3 |
03/24e |
36.6 |
20.5 |
3.8 |
3.50 |
99 |
0.67 |
5.3 |
03/25e |
37.8 |
22.0 |
4.0 |
3.70 |
99 |
0.66 |
5.6 |
03/26e |
39.0 |
23.3 |
4.3 |
3.70 |
100 |
0.66 |
5.6 |
Note: *EPRA earnings exclude revaluation gains/losses and other exceptional items. **NAV measure is net tangible assets (NTA), currently the same as IFRS NAV.
With occupier demand remaining robust, and rents increasing, across much of the commercial property market, Picton’s previously published Q324 trading update showed it continuing to lock in significant rental increases, at or above estimated rental value (ERV) and/or passing rent. There is a significant opportunity to further grow portfolio income by closing the wide (£13.2m at H1) gap between current passing rents and ERV. The key opportunities are in moving industrial rents up to market levels (industrial assets represent c 60% of the portfolio value and retail warehouses a further c 7%) and to reduce voids in office sector assets. Picton’s strategy for reducing office voids is to let attractive, recently refurbished space, while also selectively repositioning others for alternative use and sale.
Angel Gate, with occupancy of c 50%, was Picton’s second largest office asset, and the largest portfolio void. It was sold at a 5% premium to its Q3 valuation, enhancing NAV. 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. The company is considering options for the remaining proceeds of £13.2m. All remaining borrowings are now long term, with an average fixed rate of 3.7%, and a first maturity in 2031. LTV was reduced to c 25%. Re-purposing plans are underway at other office properties, including at Longcross in Cardiff (12% of the H124 portfolio void), where contracts have been exchanged for its sale to an experienced purpose-built student accommodation developer. At Charlotte Terrace in London W14 (11% of the H124 portfolio void), having achieved vacant possession in one of the four buildings, Picton has submitted a planning application for its alternative residential use.
We have not changed our forecasts for the Angel Gate sale and will review these when FY24 results are published later this month. The new DPS target is reflected in the FY25e DPS shown in the table above.
|
|
Research: Healthcare
AFT continues to expand its Maxigesic IV footprint with the announcement of a licensing agreement in Brazil, the largest pharma market in South America and tenth largest market globally. The deal signed with Halex Istar, a leading manufacturer of injectables in the country, provides a strong foundation for further extension into the Latin American and global markets, an overarching long-term goal for AFT. Maxigesic IV is a higher-strength version of AFT’s proprietary paracetamol plus ibuprofen formulation targeting post-surgical pain relief in the hospital setting. It is currently available in 36 countries, including the US, with the recent launch by Hikma, its distribution partner.