Aim-listed Circle Property has announced its annual results for the year ended 31 March 2020, during which its Chief Exec, John Arnold, has described the company as delivering “a very resilient performance”. The Company has provided the following key highlights from its results:
Financial Highlights: Resilient Performance
- Further 3% growth in Net Asset Value (“NAV”) per share to £2.85 (31 March 2019: £2.77)
- Fourth successive year of delivering Net Asset Value (“NAV”) growth
- NAV up 91% since IPO in February 2016 to £80.7m
- NAV Compound Average Growth Rate (“CAGR”) of 15.5% since IPO; total return CAGR of 17.6%
- 11.92% increase in the independent valuation of the Group’s portfolio of 14 commercial property investment and development assets in the UK to £139.45m (31 March 2019: 124.6m) demonstrating continued growth
- 14.16% increase in contracted annual rental income to £8.71m (31 March 2019: £7.61m)
- Increase in operating profit to £4.3m (31 March 2019: £3.67m) due to an increase in rental and other income, excluding service charge income, to £7.9m (31 March 2019: £7.1m)
- Profit before tax of £5.2m (31 March 2019: £15.25m)
- Earnings per share of 12p (31 March 2019: 53p)
- Year-end LTV of 44% and year-end LTV net of cash of 42%, in target range
- Proposed final dividend of 2p per share for the year ended 31 March 2020, which together with the interim dividend of 3.3p per share (paid in January 2020) brings the total annual dividend to 5.3p per share
Operational Highlights: Generating Strong Returns and Capital Growth
- Rent collection for both March and June 2020 quarters was 91% and 87% respectively
- 88.42% of total portfolio is let and income producing
- 100% of the Company’s portfolio is within the regional office sector
- 88.35% located in Milton Keynes, Bristol, Birmingham and Maidenhead and the majority is flexible in terms of 1000-5,000sq.ft. space with the ability to be sub-divided if required
- Successful £14.2m acquisition of 71,500 sq ft. Concorde Park, Maidenhead – now 61% let
Market Overview
- The regional letting market up to the YE March 2020 had continued to remain stable for affordable good quality well-located offices, as companies sought to relocate to save costs, being attracted by lower employment costs, business rates and rent, coupled with the demand from local professional occupiers and SMEs
- Post YE March 2020, both the investment and letting markets have been affected by the COVID-19 pandemic with much quieter activity in both markets being reported. The current economic uncertainty and likely prospect of recession during 2020 has reduced both investor and tenant confidence for commercial property more generally, putting rental levels and valuations under threat, albeit predominantly in the retail and leisure sectors where the Group has little to no exposure
Outlook
- Confidence in outlook based on flexibility of regional commercial property portfolio and the team’s expertise in extracting both income and capital value
Comments from John Arnold, Chief Executive of Circle Property Plc
“Our regional office assets have been individually selected by virtue of their strength of location and letting prospects which, alongside our active management expertise, has enabled Circle to deliver a very resilient performance during the year.
“Our approach in providing flexible regional commercial work places means that we are cautiously optimistic about our future performance.”