Picton Property delivered strong income and valuation growth in annual results, with NAV up 4.2% to 100p per share and EPRA earnings up 5% to 4.2p.

The company’s portfolio increased in value by 3.8% on a like-for-like basis to £723m, while contracted rent was up 3.0% over the year to 31 March 2025.

Income growth gave the company room to increase its 2025 dividend by 5.7% to 3.7p, 113% covered by earnings. The company has lifted dividend this year by a further 2.7%.

The company has now outperformed its MSCI benchmark for 12 consecutive years with a total property return of 7.3% for the year (MSCI UK Quarterly Property Index: 6.3%).

A feature of Picton’s strategy over the past few years has been repositioning its office portfolio to higher value uses such as residential. During the year the company has reduced its office exposure from 30% to 24%, with three disposals of repositioned assets completed during the year totalling £51m, 5% above March 2024 valuation.

Picton’s loan to value (LTV) reduced to 24% (2024: 28%) during the year, having fully repaid its revolving credit facility (which reduced annual finance costs by £1.0m from the prior year). Weighted average interest rate reduced to 3.7% (2024: 3.9%). 100% of drawn borrowings are fixed with maturities not until 2031/32.

Comments

Chair of Picton, Francis Salway, commented: “These are very positive results across key metrics. We have delivered a profit of £37 million, 5% growth in EPRA earnings and 4% growth in net assets.

“We are focused on income and value growth for the benefit of shareholders. We have outperformed the FTSE 350 REIT Index and this is the fifth consecutive year of EPRA earnings growth. We have again operated with a well-covered dividend and recently announced a 2.7% dividend increase, representing the fifth increase since 2020.

In January of this year, we commenced our share buyback programme, utilising proceeds from asset disposals to enhance earnings. We intend to continue this, as appropriate in the forthcoming year.”

Michael Morris, chief executive, added: “We have made further progress repositioning the portfolio, improved occupancy to 94% and reduced office exposure by a fifth, with £51 million of disposals ahead of March 2024 values. Alongside share buybacks, we have used these proceeds to repay debt, reduce financing costs and invest to improve our assets.

“Asset management initiatives have created value irrespective of wider market conditions. This is demonstrated by our continued property level outperformance against the MSCI UK Quarterly Index this year, with our diversified approach enabling a track record of upper quartile property outperformance since launch in 2005.

“Looking forwards we will seek to grow earnings through further disposals of low yielding assets and accretive redeployment of capital. Our significant reversionary potential in the portfolio, combined with our long-term fixed rate borrowings, puts us in a strong position to deliver income and value growth.”