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Picton’s NAV nudges up in half year results

Picton Property

Picton Property Income announced steady half-year results today that saw its net asset value (NAV) nudge up 0.9% to 94p per share.

The slight increase in NAV was in part down to a 1.2% increase in the value of its property portfolio, driven by its large weighting to the industrial and office sectors.

It posted profit after tax for the six months to 30 September 2019 of £14.5m, down from the £18.9m in the corresponding period last year. Earnings were also down – from £11.8m last year to £10.2m this year. This was down to lower occupancy in the portfolio.

Earnings still cover its dividend, which in the period totalled 1.75p per share, at a ratio of 107%.

During the period, Picton completed 14 lettings worth £1.5m a year in rent, 20 lease renewals that on average were 19% ahead of estimated rental value (ERV) and 12 rent reviews that secured a uplift in rent of £0.5m a year.

The company recorded a total portfolio return of 3.2% – comfortably ahead of the MSCI Property Index of 0.8%.

A breakdown in the performance of its portfolio, which is weighted 46.8% industrial, 34.6% offices and 18.6% retail and leisure, unsurprisingly showed the industrial properties perform strongly with capital growth of 3.8% and rental growth of 1.2%. Its retail and leisure holdings saw a 6.1% decline in value, however passing rent was up 3.9%.

The company is undertaking a number of refurbishment projects on the vacant space in the portfolio and hopes to realise a large chunk of the £9.4m in reversionary potential that exists.

Chief executive Michael Morris told analysts that investing in the portfolio was the right thing for the company to do “in this current cycle”. He said the company was seeing very few investment opportunities in the market that made sense for it. Therefore it would look to grow its underlying income through letting up the refurbished space.

PCTN : Picton’s NAV nudges up in half year results

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