Picton Property Income Ld Share Discussion Threads

[gorilla36] 07/1/2019 08:51

Quality bit of business (Swansea) from a quality company.

[danielbird193] 20/11/2018 13:47

Yes, this a nice "tucker awayer". Will be in my portfolio for many years to come.

[petewy] 20/11/2018 13:30

Thanks to spdgh sship, avid reader. Long haul stock.

[skyship] 20/11/2018 13:19

EDISON Update:

[speedsgh] 13/11/2018 11:00

From Half Year Results...

"During the period we paid dividends of 1.75 pence per share, an increase of 3% compared to a year ago. Our last dividend to be paid as an investment company will be later this month. From February next year we will continue to pay dividends on the usual quarterly basis but primarily in the form of Property Income Distributions (PIDs). We will review our dividend policy in light of the minimum REIT distribution requirements and prevailing market conditions ahead of this time."

"Volatility in the listed real estate equity market has contributed significantly to the fact that the share price does not currently fully reflect the underlying net asset value of the Company, but this is not uncommon."

Strategic Priorities

During the period, we remained focused on our strategic priorities to ensure we continue to deliver long-term value for shareholders. As we have stated over the past few years, Picton aims to be one of the consistently best performing diversified UK focused property companies listed on the London Stock Exchange.

By repaying some debt in July, we have reduced financing costs and secured additional changes to our loan arrangements which will translate into future operational flexibility. We have de-risked the capital structure, undertaken a small number of disposals, which have been accretive to net asset value, and continue to improve the effectiveness and efficiency of our business model through our REIT conversion and associated changes.

We expect to see the savings from becoming a REIT start to flow through in the next six months. We have also created additional operational efficiencies by migrating management and control to the UK and by streamlining our reporting process, removing the duplication of net asset value statements overlapping with annual and half yearly results.


Property Strategy

We have a good quality portfolio of assets that continues to outperform the MSCI IPD Quarterly Benchmark.

We have been overweight in the outperforming industrial, warehouse and logistics sector, whilst at the same time being underweight in the far more challenging and underperforming retail sector. This is more fully detailed below. Despite a small reduction over the period, occupancy remains high and the Board is encouraged by initiatives both ongoing and planned for assets within the portfolio.

We continue to work with our occupiers to provide space that meets their needs and, through a process of upgrading space, help mitigate any risks to our cashflow. We hope to be able to report on several specific asset management initiatives before the year end.

[speedsgh] 13/11/2018 10:58

Half Year Results -

Picton announces its half year results for the period to 30 September 2018.

Growth in NAV and EPRA earnings
> Profit after tax of £18.9 million
> Total return of 3.9%
> Increase in EPRA earnings per share of 9.5% to 2.2p
> Increase in EPRA NAV per share of 2.0%, to 92 pence per share
> Dividends paid of £9.4 million or 1.75 pence per share
> Dividend cover of 125%

Corporate Highlights
> Converted to a UK REIT on 1 October
> Successfully changed listing status to commercial company, from investment company
> Repaid £33.7 million of fixed debt using cash reserves and lower cost revolving credit facility
> Gearing reduced to 25.5% and weighted average interest rate reduced from 4.1% to 4.0%
> Net saving of £1.1 million in annual finance costs
> Created greater operational flexibility by restructuring one of the principal debt facilities

Portfolio outperformance
> Total property return of 4.4%, outperforming the MSCI IPD Quarterly Benchmark of 3.2%
> Total property return and income return outperformance ahead of MSCI IPD over 1, 3, 5 and 10 years
> Like-for-like valuation increase of 1.5%, driven by industrial and office sectors
> Two disposals for £11.8 million, 8.4% ahead of March 2018 valuation
> Occupancy at 94%, ahead of the MSCI IPD Quarterly Digest of 92%

Picton Chairman, Nicholas Thompson, commented:

“Picton aims to be one of the best performing diversified UK-listed property companies and is therefore delighted to have delivered yet another solid set of results during the first half of the year, generating a 4% total return and an increase in EPRA earnings. With the resounding support of our shareholders, we also successfully completed the transition to become a UK REIT and other associated changes, realigning the Board in the process.”

Michael Morris, Chief Executive of Picton, commented:

“We continue to manage the portfolio and our occupiers, with a view to enhancing our income and capital position through the investment cycle. Our current performance can be directly attributed to the work we’ve put into reshaping the property portfolio, and separately having considerably strengthened the Company’s balance sheet over the past few years.”

[speedsgh] 25/7/2018 19:10

PCTN scheduled to enter UK REIT regime on 1/10/18...

Net Asset Value as at 30 June 2018 -

Picton (LSE: PCTN), the property investment company, announces its Net Asset Value for the quarter ended 30 June 2018.

Highlights during the quarter included:

Improved Balance Sheet and early debt repayment

- Net Assets increased to £494.6 million (31 March 2018: £487.4 million).
- NAV/EPRA NAV per share rose 1.5% to 91.8 pence (31 March 2018: 90.4 pence).
- Total return for the quarter of 2.5% (31 March 2018: 3.1%).
- Post quarter end completed the early repayment of £33.7 million of debt due to mature in July 2022.
- As a result of the early repayment a proforma 30 June NAV would be 91.1 pence per share.

Dividend declared with strong cover

- Dividend of 0.875 pence per share declared and to be paid on 31 August 2018 (31 March 2018: 0.875 pence per share).
- Annual dividend equivalent to 3.5 pence per share, delivering a dividend yield of 3.9%, based on 23 July 2018 share price.
- Dividend cover for the quarter of 121% (31 March 2018: 128%).

Further valuation gains

- Like-for-like increase in property portfolio valuation for the quarter of 0.8% (31 March 2018: 1.4%).
- Completed the disposal of two office assets for a combined sale price of £11.8 million, 8.4% ahead of the March valuation.
- Completed seven lettings, six lease renewals / regears and two rent reviews, on average 6.2% ahead of the March ERV, with a combined annual rent of £0.9 million.
- Occupancy of 95%, reflecting ongoing active management (31 March 2018: 96%).

REIT conversion

- Shareholder approval obtained on 23 July 2018 for REIT conversion, 99.97% of votes cast in favour.
- Intention to enter the REIT regime on 1 October 2018.

Nick Thompson, Chairman of Picton, commented:
“We have made considerable progress implementing several initiatives over the quarter which have resulted in an increase in net assets, strong dividend cover and improvements to the balance sheet, which culminated in a debt repayment post quarter end.”

Michael Morris, Chief Executive of Picton Capital, said:
“The portfolio continues to perform well with the industrial assets driving performance overall. Looking ahead, we believe Picton is well positioned with high occupancy and the ability to generate greater efficiencies later in the year on conversion to a REIT.”

[speedsgh] 25/7/2018 19:05

Dividend Declaration -

Picton (LSE: PCTN), the property investment company, today announces an interim dividend payment in respect of the financial period from 1 April 2018 to 30 June 2018, of 0.875 pence per share.

The dividend timetable is set out below:

Ex-Dividend Date - 9 August 2018
Record Date - 10 August 2018
Pay Date - 31 August 2018

[danielbird193] 25/7/2018 08:04

Reassuring update today. PCTN continues to maintain high occupancy and good rental uplifts on new lettings and rent reviews. Dividend maintained and debt paid down post-quarter end.

[speedsgh] 26/6/2018 12:35

Latest Edison research note...

FY18 builds on successful track record -

[skyship] 06/6/2018 18:07

Agreed - though that is why I see some alternative motive behind the appointment of Charles Butler as non-exec chairman.

He comes from big-company background; former CEO of Market Tech - the £2bn propco which owns great chunks of Camden Market. His appt was certainly a vote of confidence in HCFT & its Board; but it may be that he was appointed to help HCFT find scale.

[danielbird193] 06/6/2018 14:46

Thanks for the tips Skyship. Just spent an hour reading through the HCFT 2017 Annual Report and it's an impressive company. Seems to be well run, transparent and focused on shareholder value. Directors' remuneration isn't excessive given the performance over the period.

Shame it's so small, with circa 40% of the shares held by the Kingerlee company (David Kingerlee is on the Board). Seems like it could be fairly illiquid and difficult to get out if anything did go wrong.

[wirralowl] 06/6/2018 11:08

No worries, Sky, thanks for your reply.

Good question Danielbird - having had a quick look at SREI & FCRE, I can see both their divvy's have been flat for several years now, whereas PCTN has been progressive and hopefully will continue to be so, so that might be one reason.

As Ugandalad says, there are often many reasons for discounts, but I'm also inclined to stick with PCTN for the time being..

[skyship] 06/6/2018 11:01

Daniel/Ugandalad and any others searching for propcos offering a good discount and a higher yield; then perhaps consider:

# RGL @ 96p - Discount = 8.6% & current yr Yield = 8.4%

# RLE @ 56p - Discount = c20% & current yr Yield = 6.25%

Also, for perhaps the most transparent and conservatively run propco you are ever likely to find, take a look at one totally off everyone's radar. This propco has ZERO voids:

# HCFT @ 930p - Discount = c20% & current yr Yield = 5.0%

See my comments over on the Commercial Property thread:



(Disclosure - I own all three!)

[ugandalad] 06/6/2018 10:40

Ignore this had blip sending above And can’t delete this post

[ugandalad] 06/6/2018 10:40

I invested in PCTN a few years ago when it too was at a discount and paying uncovered dividends but with a clear strategy to change that. Assuming thE market is thinking I would suggest past achievements in running the business and the quality of its current portfolio in today’s market justifies the premium which could of course disappear. One other of my portfolio HSTN has been returning capital so I have been looking at alternatives that can do a”PCTN” but not straightforward. There are always reasons for the discount. Need clarity from management how that is to be managed without overly relying on buy backs. I’m keeping PCTN for growing income at least until A better opportunity comes along.

[danielbird193] 06/6/2018 10:16

I've held PCTN for the past 12 months or so and am a satisfied shareholder. However, in the interests of 'spring cleaning' my portfolio I have been doing some comparisons with other UK REITs. Most of them current sit at discounts (eg Schroder REIT 9.1% discount, F&C REIT 4.0% discount, LandSec 33.3% discount!!).

What's the justification for the slight premium on Picton shares? Would I be better reinvesting in one of the Trusts sat at a discount to try and take advantage of the value on offer?

[sleepy] 06/6/2018 08:05

I believe UK REITs must distribute at least 90% of their income

[skyship] 06/6/2018 07:38

Wirral - sorry, unable to find why I stated that 4p divi! Doesn't appear to be referenced from an IC or Edison article. Could still be of course.

[speedsgh] 05/6/2018 18:04

My initial impression was that they were guiding a probable increase subject to prevailing market conditions but the statement is poorly worded and unclear. We'll find out in due course. Would be somewhat surprised to see a reduction when the company seems in such rude health. Aimho

[wirralowl] 05/6/2018 15:07

So is it right to presume that post-REIT the dividend is likely to be increased rather than decreased, in light of their statement today?

I note Skyship in post 392 refers to a potential 4.0p dividend post-REIT (which would be very nice!), but can't find any reference to this elsewhere?

[speedsgh] 05/6/2018 09:16

Indeed, pete. Note that, as they have previously flagged, they intend to convert to a UK REIT on 1/10/18. Also state that they will review the dividend level once they have converted taking into account prevailng market conditions...

Annual Financial Results -

REIT conversion

At the time of our last Half Year Report, I advised that we were awaiting an announcement of new legislation in the UK regarding the taxation of non-resident landlord companies such as Picton. Six months later and there are now two new pieces of legislation being introduced that will impact Picton. The first is that non-resident landlord companies will be brought into the scope of UK corporation tax, from 1 April 2020. The result of this is that we would expect our liability to UK tax to increase significantly from that date. Additionally, from 1 April 2019, capital gains made by a non-resident on the disposal of commercial property will be subject to UK tax.

Therefore, any disposals the Company makes from its portfolio after that date will be taxed, consequently reducing shareholder returns. I have stated previously that we were preparing plans to convert to a UK REIT in the event of tax changes adversely affecting Picton, and these have now been finalised. We will shortly be issuing a circular to shareholders with our detailed proposals, including a number of resolutions to be voted on at a General Meeting in July.

In summary, we wish to enter the REIT regime on 1 October this year, after becoming tax resident in the UK, which is a condition of entry. There will be some changes proposed to the articles of the Company to facilitate the REIT conversion. At the same time we are proposing to transfer our technical listing status from an investment company to a commercial company, which we believe is more appropriate for Picton and is consistent with the vast majority of internally managed UK REITs. As a result there will be changes to the way the Company is managed once we are based in the UK, including having a business strategy rather than an investment objective. We will no longer have an investment management subsidiary but will be managed through a traditional board structure with an executive function. However, our investment approach and portfolio strategy will remain very similar.

We have set out, separately within this report, a ‘Question and Answer’ section on the proposed changes, and within the Governance section there is also more detail regarding management changes and the role of the Board. We believe that these changes represent an important step in the evolution of the Company and recommend their approval by shareholders.

Dividends

I am pleased to report that in each of the last three financial years we have increased our dividend, most recently by 3% in February 2018. During this year we paid dividends to shareholders of £18.5 million, an increase of 3% compared to last year, with dividend cover of 122%.

We have continued to maintain a covered dividend throughout the year, in line with our strategy and enabling reinvestment back into the portfolio. Once we are in the UK REIT regime, we will review our dividend level in light of prevailing market conditions.

[petewy] 05/6/2018 08:53

Strong financial results
Total profit after tax increased by 50% to �64.2 million
Net assets increased to �487.4 million, from �441.9 million
Increase in EPRA NAV per share of 10.5%, to 90 pence per share
Total return of 14.9%
Increase in earnings and dividends

Increase in earnings per share to 11.9p from 7.9p
Increase in EPRA earnings per share of 10.1% to 4.2p from 3.8p
Dividend increase of 3% in February 2018 to 3.5 pence per share per annum
Dividends paid of �18.5 million with dividend cover of 122%

[petewy] 04/6/2018 08:48

Results tomorrow

[speedsgh] 24/4/2018 10:41

8.6p (+10.5%) increase in NAV over the past 12 months is not to be sniffed at imo...

90.4p as at 31/3/18
88.6p as at 31/12/17
85.9p as at 30/9/17
83.8p as at 30/6/17
81.8p as at 31/3/17
80.4p as at 31/12/16
78.5p as at 30/9/16
77.4p as at 30/6/16
77.2p as at 31/3/16
75.7p as at 31/12/15