Stenprop: Half Year Results

4th December 2020 | Stenprop Limited

Financial Highlights

  • Fully covered dividend at 3.375 pence per share for the six months ended 30 September 2020 (2019: 3.375p). A scrip alternative will be offered, which the directors intend to match through the buyback of shares*.
  • 4.4% increase in diluted IFRS net asset value per share to £1.43 (31 March 2020: £1.37).
  • 4.3% growth in EPRA Net Tangible Assets (‘NTA’) per share to £1.44 (31 March 2020: £1.38) driven by an asset management led uplift in property values, with like-for-like total portfolio valuation growth of 4.4%.
  • Diluted IFRS EPS increased 82.5% to 8.38 pence (2019: 4.59 pence). Adjusted EPS was 3.40 pence (2019: 3.41 pence).
  • Net rental income for the period of £15.0 million (2019: £15.8 million). Profit from operations increased 65.0% to £29.1 million
    (2019: £17.6 million).
  • Headline earnings per share grew 2.0% to 3.08 pence (2019: 3.02 pence).
  • Strong balance sheet with cash and cash equivalents of £51.1 million, including free cash of approximately £40 million.
  • Group LTV was 36.6% (March 2020: 40.8%), falling to 29.6% when applying free cash (March 2020: 27.7%). Significant headroom exists for both interest cover and LTV loan covenants.

Operational Highlights

  • Rent collection for the period remained strong at 90% across the portfolio as at 30 September 2020.
  • 18% average uplift in MLI passing rents driven by continued strong leasing momentum with 119 new lettings/lease renewals at an average lease term of 3.8 years, generating £2.3 million of rental income per annum.
  • MLI occupancy up 2.2% to 93.3% (March 2020: 91.1%) with total occupancy at 94.4%.
  • Notable increases in traffic through our industrials.co.uk website resulted in a 30+% increase in direct leasing calls and total average weekly leasing calls up approximately 100% compared to 2019.
  • Five MLI estates acquired in the six-month period for an aggregate purchase price of £40.0 million, generating an additional £2.5 million of rental income per annum. A further three estates completed post period end for £20.2 million, generating an additional GBP1.4 million of rental income per annum.
  • MLI portfolio surpassed five million sq ft for the first time, growing the portfolio value to £360.5 million, up from £291.6 million at the same time last year and representing 62.8% (2019: 44.6%) of the total property portfolio by value with a target of 75% by the end of the financial year.
  • Recycling of assets on track with the sale of the Neucӧlln Carrée retail park in Berlin at a sale price €27.0 million, 15.4% ahead of the year end valuation. Further German sales expected in the second half of the financial year.

Commenting on the results Paul Arenson, CEO of Stenprop, said: “This is a strong set of results for the Company which we have delivered against the uncertain backdrop of the COVID-19 pandemic. Leasing activity was robust with occupancy levels and rents increasing quarter on quarter for the period. Our ability to market space through our web-based portals and to enter into leases online was a key factor in delivering these results. Even at the peak of the lockdown we were able to quickly capture demand through our proprietary industrials.co.uk platform and Smart Leases and utilise the real time data it affords. This level of data analysis flagged the post lockdown spike in occupier demand and was an important early indicator in giving us the confidence to recommence our UK MLI investment programme.

As a result, our portfolio transition strategy remains on track with a number of acquisitions seeing us surpass five million sq ft of UK MLI for the first time during the period and on target to a 75% weighting by the financial year end. In addition, we completed the disposal of a German retail park at a healthy premium to book value and expect further German retail asset disposals in the coming months. This progress and the Company’s performance have given us the confidence to both maintain our fully covered dividend for the first half of the year and confirm guidance, for the first time, of a similar level of dividend for the next six month period.”

* ‘EPRA’ means European Public Real Estate Association. ‘NTA’ means net tangible assets. ‘EPS’ means earnings per share. ‘LTV’ means loan-to-value. ‘IFRS’ means International Financial Reporting Standards. ‘Like-for-Like’ is a change in measure for reference data existing in the current and previous period. ‘Free cash’ is cash and cash equivalents less restricted cash and cash held for other purposes.

*The interim dividend was declared by the directors on 2 December 2020. Part of the distribution will be a Property Income Distribution (known as a PID) which, subject to certain exemptions, will attract UK withholding tax. A further announcement informing shareholders of the salient dates and tax treatment will be released in due course.

 

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