McKay Securities’ results for the year ended 31 March 2015 are out. The EPRA NAV was up 18.9% to 270p. Adjusted profit before tax up 69.2% to £5.79m (fall from £38m to £33m on an IFRS basis which takes into account changes in the value of interest rate hedges). The Total Shareholder Return was 24.8% – they compare this with a 22.8% return on the FTSE 350 Real Estate Index. The final dividend was upped from 5.9p to 6p to make 8.7p for the year.
Occupancy level increased from 86.8% to 91.8% (excluding developments)
The four refurbishment projects at 66 Wilson Street, EC2; 329 Bracknell; Switchback Office Park, Maidenhead and Strawberry Hill House, Newbury resulted in a 30.9% valuation surplus.
Works have now commenced on the speculative development of high quality office projects at 30 Lombard Street, EC3, London Road, Redhill, and 9 Greyfriars Road, Reading. Completion of construction work is anticipated by mid 2018, mid 2016 and early 2016 respectively.
Capital expenditure to complete these projects will be in the region of £50.m. They completed a refinancing of loan facilities in early May 2015. The new arrangement provides a competitive cost of debt when fully drawn of 3.8% at current rates. The refinancing increased the loan portfolio by £25m to £175m, providing additional headroom for project expenditure and further acquisitions over drawn debt at the year end of £91.5m. The weighted average maturity of loans was extended from 1.6 years to 9.1 years, due primarily to a new 15 year, £55m facility with Aviva Commercial Finance Ltd. at a fixed rate of 4.13% pa. At the same time the notional value of the historic interest rate swaps was reduced by a further £35m to £45m at a cost of £13m or 14.3p off the EPRA NAV. The Loan to Value ratio at the end of the period was 25.9% (31 March 2014: 14.7%).
MCKS : McKay Securities embarks on four speculative developments