Steady performance from Mucklow (A&J) – Rupert Mucklow, chairman of Mucklow (A&J) Group says that he is pleased to report another steady performance by the Group for the year ended 30 June 2017. He said “Our property portfolio continued to perform well, in favourable market conditions. We maintained a high occupancy level throughout the year and delivered further rental growth, which in turn has contributed towards a GBP0.9m rise in underlying pre-tax profit (6.0%) and 25p increase in EPRA net asset value per share (5.6%).”
Statutory pre-tax profit was GBP29.6m, which included a revaluation surplus of GBP13.0m (2016: GBP25.2m, including a revaluation surplus of GBP10.2m). The underlying pre-tax profit, which excludes revaluation movements, profit on the sale of investment and trading properties and early repayment costs, increased by 6.0% during the year to GBP15.9m (2016: GBP15.0m). EPRA adjusted earnings per ordinary share was 4.9% higher at 25.05p (2016: 23.88p). EPRA net asset value per ordinary share increased by 5.6% during the year from 446p to 471p. Basic net asset value per share increased by 26p to 469p.
Shareholders’ funds rose to GBP296.7m (2016: GBP280.6m), while total net borrowings amounted to GBP78.5m (2016: GBP71.2m). Net debt to equity gearing was 26% and loan to value (“LTV”) 20%.
The Board is recommending the payment of dividends amounting to 12.24p per ordinary share, an increase of 3% over last year (2016: 11.88p), making a total for the year of 22.12p (2016: 21.47p).
The chairman went on to say that “The occupational market in the Midlands remained active throughout the year, with demand outstripping supply. As a consequence, we have been able to continue to achieve average rental growth of around 10% on new lettings, lease renewals and rent reviews.
Our vacancy rate at 30 June 2017 was 4.2% (31 December 2016: 4.1%). This included 1.2% of vacant space returned to us on the expiry of five leases, just prior to our year end in June 2017. Our vacant space also included one empty office building (0.6% of vacant space) which is currently being refurbished and not available for rental until December 2017. In addition, approximately 1.0% of our vacant space was reserved at the year end. The vacant office building, comprising 24,125 sq ft, is in a prime location, close to Birmingham International Railway Station and Airport and is currently undergoing a substantial refurbishment at a cost of around GBP2.7m. When completed later this year, it will have a rental value of around GBP0.54m per annum.
We acquired a prominent 70,182 sq ft industrial/warehouse building during the year at Barton-Under-Needwood for GBP5.6m. The property is located at the front of Barton Business Park, on the A38 between the A50 and A5 trunk roads. Built in 2005, the unit is currently let at a rent of GBP0.4m per annum.
We also completed the acquisition of a pre-let office development at Grove Park, Leicester for GBP4.7m. The property comprises 20,829 sq ft of high quality offices let at an initial rent of GBP0.35m per annum.
Construction on our first pre-let development at i54 Wolverhampton started in the second half-year, with completion anticipated for early 2018. The property will comprise a 44,250 sq ft industrial unit and the initial rent will be GBP0.28m per annum.
A vacant 12,000 sq ft office building in Henley on Thames was sold during the year to a residential developer for GBP4.1m, to show a profit of GBP1.9m over the last valuation.
The regional property investment market was also very competitive during the year, particularly for high quality properties with rental growth potential. There were only a limited number of industrial investment opportunities and transactions recorded, but yields contracted a little further, due to the heavy demand and tight supply of stock.”
They refinanced the majority of their banking facilities, extending the terms of their loans and reduced the average cost of borrowing.
MKLW : Steady performance from Mucklow (A&J)