Modest share buyback announced and for once get an uptick lets see if it holds. |
~ NAV/EPRA NTA per share increased by 2.3% to 98.5p (30/9/24: 96.3p)
---------------------------
~ Q3 dividend of 0.925p payable 28 Feb (XD 6 Feb)
~ Dividend cover for the quarter of 111% |
Picton appoints Francis Salway as Chair -
"... We are pleased to welcome Francis to the Picton team and look forward to working together as we seek to create value for shareholders. His extensive experience in the property sector and strategic vision will be invaluable as we seek to take advantage of opportunities arising from current market conditions". |
Portfolio Update: Office disposal and asset management activity improve income and occupancy - |
The real advantage here is they have debt locked in for next 7 yrs at lowish cost not many can match that. What's striking here, partly because they show it, is the cost of voids which is soaking up nearly 4.5m pa currently. This is nearly 10% of NRI yet occupancy is at 92% although they have some big London assets on the disposal list so that may alleviate this cost. Also sitting on a lot of cash which they don't seem to be any hurry to rehome but with short term rates falling back wont help us much going forward.
Never invested here as others rightly say you can a lot more yield for your buck elsewhere. Mind you still feel they should have paired up with some of the others. |
HEADER updated.
Agreed, better opportunities elsewhere in the sector. ASLI looks crazy cheap as some investors getting bored waiting for disposal news in the wind-up. |
Solid reliable company with relatively unexciting dividend. Better opportunities elsewhere at the moment imo |
Half Year Results -
Commenting on the results, Michael Morris, Chief Executive of Picton, said:
"We are pleased with the progress we have made during the period delivering EPRA earnings growth of nearly 12% compared to this time last year. Net assets have increased and we continue to operate with a fully covered dividend.
We have improved occupancy and further invested into upgrading our portfolio. With asset disposal proceeds we have also fully repaid floating rate debt, with the remaining facilities now 100% fixed, with a seven-year maturity profile.
We are progressing our portfolio repositioning strategy and are also encouraged by our pipeline of asset management activity. Alongside our investment into our portfolio this will drive occupancy, income and capital growth." |
A lot of words but no values! |
 Disposal Update -
BACKGROUND
In October 2023, Picton exchanged contracts to sell a partially vacant office building to an experienced student accommodation developer.
The transaction was conditional on planning permission, for which an application was submitted in May 2024.
UPDATE
Picton has been notified that a resolution to grant planning permission has been secured. The development will deliver 706 beds across 488 units.
To facilitate the disposal, Picton has secured vacant possession of the building during 2024.
Completion of the disposal is expected before the end of the year, following receipt of a satisfactory s106 agreement. This will enable the purchaser to commence the development in early 2025 and complete it ahead of the 2028/9 academic year.
The sale price is dependent on the exact planning consent secured and, specifically, on the number of beds secured, subject to a collar and cap. The size of the consented scheme means that Picton will benefit from the maximum top up and, as such, the transaction is accretive relative to the June 2024 NAV.
A further update will be provided when completion occurs. |
NAV update has nothing exciting in it just BAU although at least they have a strategy to deal with the offices by repurposing where possible. Balance sheet fine with 7yrs to run on debt and 32m of cash now accumulated although be nice to know what the plan is. Yield down to 5% following recent run up which is covered but is lowish here compared to contemporises so no interest for me. |
Leasing and office repositioning progress -
Picton is pleased to provide an update on asset management transactions identified in its Annual Results for the year ended 31 March 2024, announced on 23 May 2024.
Lettings improve occupancy and capture reversionary potential
The Company has completed lettings with a combined rental of £0.8 million per annum, 4% above the 31 March 2024 estimated rental value (ERV).
These include 31,500 sq ft of industrial lettings in Bracknell and Warrington and a 13,000 sq ft office letting at Tower Wharf in Bristol, where an existing occupier will be relocated within the building, taking 140% more floorspace.
Following these lettings and the previously announced post year end disposal of Angel Gate, London EC1, the proforma occupancy of the portfolio has increased to 93% (31 March 2024: 91%).
Office repositioning progress
In respect of identified office assets to be repositioned for alternative use, the Company has reached the following milestones:
Charlotte Terrace, London, W14 - the Company has secured planning permission to create six residential units in void office space.
Longcross, Cardiff - in accordance with the sale contract, the purchaser has now submitted a planning application to convert the substantially void office building to student accommodation, comprising inter alia 706 units. Upon receipt of satisfactory planning permission, this number of units will trigger an additional overage payment to the Company on completion. As such the sale price is expected to be approximately 20% ahead of the 31 March 2024 valuation. |
Picton offloads more offices as generalist eyes more M&A opportunities - |
Taken a look at results and not in bad shape with income up but a fair part of it was due to dilapidations receipts. Voids costing 4.1m off the bottom line but some progress made in getting rid of one of the offices post year end and another office on the starting blocks if they can secure change of use on it. So currently the increased divi easily covered and scope to move it up a tad more imv. RCF neutralised with recent sale but main debt has earliest expiry of 2031 so unlike others has no immediate threat of finance costs going up.
Still better value elsewhere but should it drop back again may have a nibble. |
Preliminary Annual Results - |
@speedsgh still sub 6% yield better value elsewhere currently. As they dabbled on merging with UKCM one suspects they've run the slide rule over a few others so always possibility of more corporate action. |
Picton Announces 5.7% Increase in Dividend -
Picton today announces a 5.7% increase in its dividend, effective May 2024. The interim dividend payment in respect of the financial period from 1 January 2024 to 31 March 2024, will be 0.925 pence per share (1 October 2023 to 31 December 2023: 0.875 pence per share).
Picton intends to maintain a fully covered dividend at this increased level, which follows recent portfolio activity and the subsequent repayment of the Company's floating rate debt.
The dividend timetable is set out below:
Ex-Dividend Date: 9 May 2024
Record Date: 10 May 2024
Pay Date: 31 May 2024
The dividend of 0.925 pence per share will be designated as a property income distribution ('PID'). |
@specto not yet but its share price has dropped more than some of its peers but much better value elsewhere still. PCTN and CREI would make a good combo but as @Sky says both too independent but maybe AEWU or AIRE would be a good fit. |
A while since I've looked at PCTN, but is it really better than say the near-certain returns at API, the yield at say EBOX, or the better sub-sector at say SHED? |
Yield closing in on 6% makes it start to look interesting especially as its covered with a bit of margin currently following the Angel Gate disposal clearing the RCF with not much loss of rental income. |
might have to change the header and looks like more downside to come although close to chart support |
Dividend Declaration -
Picton announces an interim dividend payment in respect of the financial period from 1 October 2023 to 31 December 2023, maintained at 0.875 pence per share.
The dividend timetable is set out below:
Ex-Dividend Date: 8 February 2024
Record Date: 9 February 2024
Pay Date: 29 February 2024
The dividend of 0.875 pence per share will be designated as a property income distribution ('PID'). |
Trading Update and Net Asset Value as at 31 December 2023 -
Lena Wilson CBE, Chair of Picton, commented:
"The real estate market showed continued resilience from an occupational perspective, with all three core sectors showing positive rental growth for the year. With capital values having seen on average a 25% write down since their 2022 peak, the outlook, assuming interest rates have peaked, will become supportive and as such we expect a stabilisation of values in 2024."
Michael Morris, Chief Executive of Picton, commented:
"This quarter we have agreed some significant rental increases, which have mitigated the impact of outward yield movements, against a backdrop of rising interest rates in 2023. We have maintained a well covered dividend over the period and made good progress on specific asset management initiatives. These will enable us to improve earnings as we reposition our portfolio, to ensure it continues to meet evolving occupier needs. As we start 2024, we are already encouraged by portfolio activity."
Financial Highlights
• Net assets of £524.3 million (30 September 2023: £537.1 million).
• NAV/EPRA NTA per share decreased by -2.5% to 96.0 pence (30 September 2023: 98.5 pence).
• Total return for the quarter of -1.6% (30 September 2023: 0.0%).
• LTV of 27.7% (30 September 2023: 27.7%).
Operational Highlights
• Like-for-like portfolio valuation movement of -1.5% over the quarter, with the industrial sector showing most resilience.
• Secured a 33% increase against the previous passing rent from four rent reviews in the industrial and retail sectors, with an annual rent of £2.3 million, which was 5% ahead of the September 2023 ERV or the ERV at the time of the review if prior.
• Renewed / regeared two leases in the industrial sector, with a combined annual rent of £0.1 million, an increase of 101% against the previous passing rent and in line with the September 2023 ERV.
• Completed five lettings in the industrial and office sectors, securing a combined annual rent of £0.5 million, in line with the September 2023 ERV.
• Secured valuable residential permitted development rights at Angel Gate EC1, in order to maximise future disposal proceeds.
• Stable occupancy at 90% (30 September 2023: 90%).
Dividend
• Interim dividend of 0.875 pence per share declared in respect of the period 1 October 2023 to 31 December 2023 and to be paid on 29 February 2024 (1 July 2023 to 30 September 2023: 0.875 pence per share).
• Annualised dividend equivalent to 3.5 pence per share, delivering a dividend yield of 5.3%, based on the share price at close of business on 26 January 2024.
• Dividend cover for the quarter of 108% (30 September 2023: 115%). |
Well. that seems to be the end of that stupid little jaunt. Hopefully didn't cost shareholders too much in fees! |
The PCTN approach to UKCM, a company twice their size, was rather bizarre.
They have no way to grow themselves through M&A as they trade on a 32% NAV discount. |
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