FULL YEAR RESULTS TO 31 MARCH 2021

STRONG RESULTS DRIVEN BY CONTINUED OCCUPIER DEMAND AND EFFECTIVE ASSET MANAGEMENT, AS MULTI-LET INDUSTRIAL (“MLI”) TRANSITION NEARS COMPLETION

Stenprop Limited (“Stenprop” or the “Company”), the UK multi-let industrial property company, announces results for the full year to 31 March 2021.

Commenting on the results, Paul Arenson, CEO of Stenprop, said: “This has been a year of strong results and continued transformation for Stenprop. A combination of the efforts of our asset management team, the strength of occupier demand for our multi-let industrial space and the quality of our portfolio, led to a 10.1% increase, on a like-for-like basis, in the valuation of our MLI portfolio and underpinned like-for-like MLI rental growth of 5.6% for the year.

“We remain firmly on track to become a 100% UK MLI business by the end of the current financial year, having reached 74% by the year end, up from 58% at the start of the year. This has been driven by a successful investment and divestment programme, with disposal of our non MLI assets achieved at an average uplift of 15% on their valuations at the beginning of the year. The capital from these sales, along with our existing cash levels, will allow us to acquire approximately £100 million of MLI assets over the coming financial year.

“We will continue to invest in our proprietary industrials.co.uk platform. It has been a key driver of performance, assisting us to deliver a record-breaking year of leasing activity, whilst the market intelligence it affords gave us the confidence to resume investment activity ahead of plan. Having committed to our MLI strategy over three years ago, we are starting to see the rewards of our conviction and believe the strength of the team, coupled with the favorable structural trends, position us to continue delivering strong results for shareholders.”

Asset management continues to underpin valuation and earnings growth

• Total Accounting Return doubled to 11.4% (31 March 2020: 5.7%)
• Declared covered total dividend for the year of 6.75 pence per share (2020: 6.75 pence).
• Adjusted earnings per share of 6.78p (31 March 2020: 6.88p), mainly reflecting a bad debt expense of £3 million compared with a bad debt expense last year of £0.5 million which was before COVID-19.
• 6.5% increase in EPRA Net Tangible Assets (‘NTA’) per share to 147 pence (31 March 2020: 138 pence)
• Portfolio valued at £582.3 million (2020: £532.6 million), reflecting a like-for-like valuation increase of 6.3%. This was primarily driven by a 10.1% increase in the like-for-like value of the MLI portfolio. 65% of this was as a result of rental growth and 35% as a result of a yield change

Platform efficiency and occupier demand driving performance

• Like-for-like rental growth across the MLI portfolio of 5.6% for the year (2020: 5.6%), driven by average uplifts from previous passing rents upon new lettings and renewals of 16.3%.
• MLI portfolio vacancy has fallen to 6.3% on 31 March 2021 from 9.0% on 31 March 2020 because of high demand and limited supply of MLI units in the market
• ERV across the portfolio grew 6.2% to £6.16/sq ft (2020: £5.80/sq ft), reflecting a 12.8% premium to the average passing rent of £5.46 sq ft (2020: £5.27/sq ft)
• Over 60% of leases contracted through Stenprop’s short form digital ‘Smart Leases’
• Robust rent collection of 90%
• Industrials.co.uk website users up 75% year on year

Multi-let industrial transition strategy nearing completion

• Multi-let industrial assets comprise 74.3% of total portfolio (2020: 58%) with Stenprop on target to reach 100% by 31 March 2022
• 14 individual MLI estates, totalling over one million sq ft, acquired during the year for £91.5 million in line with £90 million target
• Disposed of £79.5 million of non-MLI assets in Germany, achieved at an average premium of 15% to the 31 March 2020 valuations

News in full

Below is a webinar recorded today with CEO Paul Arenson who provides us with the highlights from the period