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Morning briefing: Unite restructures, lifts disposals to £241m; HgCapital posts second quarter of gains after the “SaaSpocalypse”; higher power prices stabilise Greencoat Renewables; Derwent London brings in £11.2m new rent

Unite (UTG), the £2.5bn student accommodation provider, has made changes to its executive committee as chief executive Joe Lister looks to lead a “smaller, more focused business” through its recovery programme. Chief operating officer Karan Khanna and group director of communications and corporate affairs Rebecca Vicary are leaving Unite and there are three new appointments: Paul Watson as managing director, operations; Will Atkinson as group property director; and Moray Notman as group commercial and higher education director.

Hg Capital (HGT) continued its recovery from the “SaaSpocalypse” sell-off in February with the software focused private equity investor posting a 2% total investment return in the third quarter. This follows a 0.5% return on net assets in the second quarter and the 5.4% loss in the first three months of the year. That leaves net asset value (NAV) down 3.1% in the first nine months of the year. Net assets rose to £2.4bn at 30 September with NAV per share of 539.1p. Shares that had fallen 23% this year, rose 2.5%, or 10p,  this morning to 405p on a 25% discount to the new NAV. Strong trading across the holdings in Hg funds added 5% to portfolio value in the quarter and 15% year to date, offset by movements in the multiples of comparable companies which reduced portfolio value by 2% in the quarter and 13% year to date. Chair Jim Strang said: “Publicly listed software share prices recovered significantly in the quarter, with the IGV software index recovering most of its year-to-date losses, but the recovery has been far more selective than the sell-off that preceded it. While the volatility of listed peers continues to weigh on HgT valuations, it is encouraging that investors are now identifying the companies most likely to benefit from AI transformation, rather than selling the sector indiscriminately.”

Europe-focused Greencoat Renewables (GRP) achieved above-budget cash generation of €9.8m in the third quarter with higher power prices offsetting an 8% production shortfall. As a result net asset value (NAV) per share was stable, rising 0.2 euro cents to 97.4c at 30 September. This follows a 2.3c decline in the second quarter which itself followed a 10.3% decline in the year to 31 March. The 8.4%-yielder reaffirmed its intention to pay 6.81c of dividends per share this year. It bought back 5.1m shares  in the quarter as part of its second ongoing €25m buyback programme. The shares were purchased at an average 19% discount compared to the 24% average of the first €25m tranche in the second quarter. Further power purchase agreements are “under active consideration” following the short-term PPA announced in the summer at Borkum in Germany.

Derwent London (DLN), the £2.2bn West End office developer, is in good shape, says Jonathan Murphy, the former Assura boss who took over as chief executive in September with strong leasing activity bringing in £11.2m of new rent in third quarter and helping to reduce vacancies to 3.4% from 4.4% at 30 June. A £50m share buyback completed at an average price of 1,959p, a 39% discount to net tangible asset per share of £32.25 at the end of last year. This added about 30p to NTA per share. Derwent shares rose 2.2% or 42p to £19.81 this morning.

Gavin Lumsden
Written By Gavin Lumsden

Head of News

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